Distillates

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).

Oct’24 Brent futures flat price rose to over $79.40/bbl at 14.00 BST before it was pressured to $77.96/bbl at 17.19 BST (time of writing). Secretary of State Antony Blinken arrived in Tel Aviv to push for a Gaza ceasefire, but Hamas accused Israel of undermining the effort. Netanyahu described his meeting with Blinken as “positive” and “conducted in good spirit.” Hezbollah claimed attacks on Israeli military sites, including Zabdin and Ramim barracks, and a missile strike near the Lebanon-Israel border. APA Corp is exploring the sale of oil and gas assets in the Permian Basin, valued at around $1 billion. The sale, managed by RBC Richardson Barr and Truist Securities, aligns with APA’s focus on shale production and debt reduction. The assets produce over 22,000 barrels of oil equivalent per day, with 60% being oil. Oil production in Libya’s Waha field has been restored to normal levels, of around 300kb/d. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.63/bbl and $2.25/bbl, respectively.

The October Brent futures flat price has seen a strong afternoon, trading from a low of $78.64/bbl at 12:30 up to $80.06/bbl at 14:50 before retracing and settling around $79.73/bbl at the time of writing (17:20 BST). In headlines, data has emerged highlighting that China was the top buyer of Russian crude in July, purchasing 47% of Russia’s total exports, followed by India with 37%, the latter amounting to $2.8 billion, according to the Centre for Research on Energy and Clean Air (CREA). Furthermore, around 80% of India’s fossil fuel imports from Russia were crude oil, while India accounted for 18% of Russia’s coal exports, second to China, which purchased 45%. Russia has become India’s leading oil supplier since the invasion of Ukraine, and more Indian refiners are now exploring long-term oil supply deals with Russia; Some of India’s private refiners, including Nayara Energy—partially owned by Russia’s Rosneft—and Reliance Industries, which runs the world’s largest refinery in Jamnagar, have already secured long-term agreements to buy Russian oil. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.77/bbl and $2.69/bbl, respectively.

The Oct’24 Brent futures contract recorded a supported afternoon. The flat price dropped to $80.30/bbl at 13:55 BST before firming up to $81.30/bbl at 17:25 BST (time of writing)

The Oct’24 Brent futures flat price fell this afternoon, from $81.14/bbl at 14.15 BST to $80.20/bbl at 17.30 BST (time of writing), as there were quite volatile movements this afternoon, especially post-EIA stats. The EIA inventory report revealed US crude stocks increased by 1.357mb, compared to the forecast 2mb draw. Stocks at Cushing OK, however, saw a draw of 1.665mb. Both gasoline and distillates saw a larger draw than forecast. US gasoline inventories saw a draw of 2.894mb compared to the forecast of 1.42mb, and distillate stocks fell by 1.673mb compared to the 250kb build forecast as refinery utilisation increased unexpectedly by 1%. Prime Minister Netanyahu has approved an Israeli delegation to Doha, Qatar, for talks on a hostage deal and Gaza ceasefire, along with the negotiation mandate. Iraq has signed preliminary deals for 13 oil and gas exploration blocks, potentially boosting output by 750,000 barrels of crude and 850 million cubic feet of gas. This sixth licensing round focuses on increasing natural gas production to reduce reliance on Iranian imports for power generation. Finally, the front (Oct/Nov) and 6-month (Oct/Apr) Brent futures spreads are at $0.75/bbl and $2.66/bbl respectively.

The October Brent futures flat price trended lower on Tuesday afternoon, falling by over $1 after hitting resistance at the $82/bbl level, reaching lows of $80.62/bbl at 17:07 BST, and trading at $80.81/bbl at 17:30 BST (time of writing). The fall in prices can be attributed to a fading geopolitical risk premia on the decreasing likelihood of an imminent attack by Iran against Israel, while the IEA report released earlier projected a grim forecast on global oil demand growth relative to OPEC projections.