22 August 2024: 09:30 BST Vitol doesn’t just set the floor in Dubai; they lift it. The Dubai physical premium (Physical minus M+2) rose 5cto 87c, while the Dubai physical discount relative to October Brent futures continued to narrow from-$1.86/bbl
The October Brent Futures contract has seen strength this morning, trading from a low of $75.84 at 09:00 BST up to $76.26/bbl at the time of writing (11:20 BST). In headlines, Nigeria’s Dangote refinery plans to source more of its feedstock domestically for Q3, reducing U.S. crude intake. Previously, less than 75% of its crude came from domestic sources; In July, Dangote signalled a shift away from U.S. imports, cancelling two tenders for 6 mb of WTI for September, as reported by Bloomberg. Starting in October, the refinery will purchase up to 445 kb/d in local currency and once fully operational, will process 650 kb/d, making it one of the largest refineries globally. In other news, Mohsen Paknejad was appointed as the new oil minister for Iran, emphasizing the need to boost production amid limited fossil fuel reserves. Iran’s oil output increased by 20% in July, reaching 3.27 mb/d, however sanctions and technological challenges continue to hinder development and exports, with 70% of its gas reserves still trapped underground, according to Reuters. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.46/bbl and $2.10/bbl, respectively.
In addition to our regular Monday CFTC COT analysis report, Onyx Insight will publish its own in-house CFTC COT forecast ahead of the official Friday report. The model forecasts changes in long and short positions using machine learning, utilising Onyx’s proprietary data.
21 August 2024: 16:30 BST In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by
Oct’24 Brent futures flat price has seen pressure this afternoon, from over $77.70/bbl at 14.00 BST to $76.30/bbl at 17.30 BST (time of writing). The EIA US inventory report revealed a 4.649mb draw in crude stocks compared to the 2.2mb forecast and a 560kb draw in stocks at Cushing, OK. Gasoline saw a draw of 1.606mb. This is less than the 1.8mb forecast, although PADD 1B saw a 1.825mb draw. Distillates saw a larger than forecast draw of 3.312mb, a 2.312mb higher draw than forecast. Refinery utilisation has seen a second consecutive week increase more than predicted, as it rose by 0.8%. The US economy created 818,000 fewer jobs than initially reported in the 12 months to March 2024, according to the Labor Department. This 30% downward revision highlights a weaker labour market. The biggest adjustment was in professional and business services, with 358,000 fewer jobs than first estimated. OPEC+ has limited room to increase output without risking lower prices due to rising supply from the US, Brazil, and Guyana, according to BP’s Chief Economist. If OPEC+ restores output in October, global oil markets could shift from a deficit to a surplus, per IEA data. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.58/bbl and $2.10/bbl, respectively.
21 August 2024: 09:30 BST In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by
The October Brent futures flat price performed better on Wednesday morning, rising from the $77/bbl level to $77.60/bbl at 11:30 BST (time of writing). API inventory data was lacklustre, as US crude stocks indicated a +347kb build against expectations of a 2.7mb draw. The crude build was more significant than the draw in gasoline and distillates, as previous consecutive draws in US crude stocks contributed to the sustained backwardation in crude.
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
The chasm between the reality of demand sentiment and the crude oil futures markets, by extension, and the continued relentless buying in the North Sea physical seems to have been driven even wider this fortnight. Oct’24 EFP continues to price relatively weakly on partials, pointing to a squeeze in the physical rather than genuine demand. Fundamentally, margins continue to struggle with product weakness, although the lower flat price lent a touch of support.
The October Brent Futures contract experienced a mixed afternoon, trading sideways initially between $77.50/bbl and $77.85/bbl before rallying up to $78.30/bbl around 15:00 BST and experiencing a strong correction downwards to trade at $77.30/bbl at the time of writing (17:30 BST).
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
The October Brent Futures contract saw a recovery this morning, trading from the day’s low of $76.59/bbl at 09:30 BST up to $77.80/bbl, at the time of writing, 11:15 BST. In headlines, a major fire has continued into today at a Russian oil depot in the Rostov region, following a Ukrainian drone attack on the Kavkaz oil facility. The attack, 150 miles from the Ukrainian border, triggered a Russian air defense response, leading to drone debris striking the facility, with a governor of the southwest Russian region stating on Sunday that the drone ignited a diesel fuel fire at an industrial warehouse. Local media reported that at least 40 firefighters had been injured, with Ukrainian officials claiming responsibility, stating the depot supplied oil to the Russian military. In the U.S., former President Donald Trump, speaking in Pennsylvania, promised to cut energy costs by reversing federal policies if elected in 2024. He criticized Biden’s green energy initiatives and warned that if Kamala Harris wins, “energy costs would triple and quadruple,” and the U.S. would “not be producing a drop of oil.” Trump emphasized boosting U.S. oil production, referring to it as “liquid gold” and advocating for energy independence. The Oct/Nov and Oct/Apr’25 Brent Futures spreads also experienced some recovery following yesterday’s fall, trading at $0.55/bbl and $2.20/bbl respectively, at the time of writing.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in Sing fuel oil and NWE gasoline.
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
The gasoline market has capitulated in the last week as the bears woke up from hibernation, putting the summer demand story to bed. Initial short-covering flows earlier this months gave bulls false hope as outright prices gapped down, breaking below previous support levels and falling to the lowest level since January 2024. The front-month September EBOB crack sold off from $15.50/bbl to $12.50/bbl, while the Sep/Oct EBOB spread fell from $45/mt to $38/mt.
