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The Oct’24 Brent futures contract traded around a range of $76.20/bbl and $76.50/bbl between 13:00 BST and 14:45 BST before strengthening further into the afternoon, firming up to $77.55/bbl as of 17:10 BST (time of writing).
Alexa, play Down by Jay Sean. What goes up must come down, and our old friend Brent Futures is once again staring down at the abyss. The bullish EIA stats reading was the perfect dead cat bounce for longs to get the hell out of there, as the US job growth revision fuelled bearish sentiment. Brent found support at the $76/bbl handle, but this feels like déjà vu. Time and time again over the last two years, just when traders thought Brent would capitulate, it always managed to find the floor at the low $70s. But as the famous investment disclaimer goes, “Past performance is no guarantee of future results.” Indeed, the holy trinity of bearish sentiments provided a perfect cocktail this week. Concerns about a US slowdown, namely its labour market and China’s economic misfortunes, paint a bleak picture for demand. Combine this with OPEC’s musings of bringing back barrels in Q4, and it’s no wonder the bears are so gung-ho.
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.
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.
Brent Futures is not the only contract that is capitulating this week as European gasoline falls at an even faster rate. Meanwhile, the Sing 0.5% marine fuel complex has been one of the few bright spots in the oil swaps market. See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch for the week ahead. Click on the relevant button below to access your COT report.
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.
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).
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.
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 Oct’24 Brent futures contract stood above $79.50/bbl at 08:00 BST today but slid off to $78.80/bbl by 11:25 BST (time of writing). The Oct/Nov Brent futures spread also softened from above $0.80/bbl at 07:00 BST to $0.75/bbl at the time of writing).
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 firmed up to $80.90/bbl around 09:05 BST, following which the flat price sold off to $79.65/bbl at 11:35 BST (time of writing).
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 North Sea continues to be a hub for outrageously bullish moves from trade houses (they’ve got to pay that fine somehow). For whom (or maybe why) the Vi-tolls is the question, maybe the Dated Brent is seeing fewer themes of honour or sacrifice but ‘no man is an island’…
The Oct’24 Brent futures contract fell below the $80/bbl mark at 05:40 BST, sitting at $79.80/bbl at 06:50 BST. However, the futures contract found support at this level and firmed up to $80.20/bbl at 11:30 BST (time of writing). The US CPI increased by 0.2% in July to 2.9% y/y (June: +3% y/y), its first sub-3% reading since March 2021. The core CPI climbed 0.2% in July (June: 0.2%). In China, new home prices declined 4.9% y/y, their sharpest drop since June 2015 (June: 4.5% y/y). In other news, Chevron Corp. will reportedly pay $550 million over 10 years to the city council in Richmond, California, as a settlement to drop a proposed new tax on Chevron’s Richmond refinery. As per a National Statistics Office (SSB) survey, Norwegian oil and gas investments are expected to hit a record 257 billion Norwegian crowns ($23.99 billion) in 2024 and remain elevated in 2025 on the back of ongoing field developments and rising inflation. Finally, at the time of writing, the Oct/Nov’24 and Oct/Apr’25 Brent futures spreads stood at $0.80/bbl and $2.70/bbl, respectively.
