Our latest energy derivatives stories across the World.
Bye Bye Biden The M1 Brent futures contract surged to its highest level since July last week but has since softened to $80.80/bbl at 12:45 GMT (time of writing). We expect the M1 contract to end the week between $78
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. In the week ending 17 Jan, CTA buying flows accelerated as net positioning rose from 22k lots to 125k lots, reaching the highest level since the peak of 9 April 2024. This highlights the bullish momentum of the futures market, where the influx of CTAs exacerbated the rally in flat price as they deployed length en masse for the first time in nearly a year. Brent and WTI futures are the most bullish products, with net positioning both at 33k. This is followed by Heating Oil and Gasoil, at 30k and 26k, respectively. US Gasoline (RBOB) is the weakest at 4.5k, and has been the most bearish product since early December.
Click below to explore our new Refinery Margins Report, offering a clear, detailed analysis of weekly and monthly shifts in key regional refinery margins. This report enables readers to pinpoint where margins are tightening or loosening across regions, drawing on proprietary yields and our leading market share in swaps to build a world class financial refinery margin—essential for understanding the evolving landscape of regional refinery economics.
Brent Consolidates Above $80/bbl Brent crude futures maintained their strength above the $80/bbl handle this week, amid supply tightness fears following the Biden administration’s sweeping sanctions targeting the Russian oil industry. As of 13:00 GMT (time of writing), Mar’25 Brent
This report reviews weekly oil inventory data from the US EIA’s Weekly Petroleum Status Report, Global Insights’ ARA Independent Storage and International Enterprise’s Singapore product storage
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch. Click on the relevant button below to access your COT report.
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
Brent crude futures have surged above the $80/bbl handle, reaching a 4-month high. Supply tightness concerns fuelled the rally as the outgoing Biden administration imposed a severe sanctions package on the Russian oil industry. This week, we expect price action
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. In the week ending 10 Jan, total CTA net positioning climbed into positive levels for the first time since July 2024, although RBOB futures continue to be net short (despite rising 21% w/w to -11k lots). Brent and WTI futures witnessed a 314% and 1694% rise w/w to 8.3k lots and 11k lots, respectively. The middle distillates complex has seen exemplary changes this week, with gasoil and heating oil noting their net CTA length climb 357% and 208% w/w to 3.7k lots and 10.4k lots, respectively- with the latter perhaps also seeing support from the significant drop in temperatures in Eastern and Southern USA.
Update to Onyx Global Oil Balance: this update’s key revision revolves around supply, with lower non-OPEC supply growth in 2025 and an upward readjustment in Iraqi crude production following methodological changes by Petro-Logistics SA. Following a comprehensive review of Iraq’s crude balance, Petro-Logistics SA has reclassified “other” refinery feedstocks as crude oil, accounting for most of the revision in the country’s output.
This report contains Onyx Advisory’s Global Oil Liquids Balance, with projections of world oil supply (including OPEC crude oil production) and world oil demand to derive implied global oil stock changes by quarter.
The report is split into two parts: a detailed global balance on page 3 and a summary balance on page 4, which shows individual OPEC country crude production assumptions over the forecast period. The OPEC crude production level is contrasted with the ‘Call on OPEC’ crude to obtain the implied global stock change.
Historical data are sourced from the IEA, while Petro-logistics SA data are used for OPEC crude production.
This report covers the correlation in daily returns (on different rolling window periods) between the main energy contracts listed on the ICE and NYMEX exchange and the S&P 500 and the DXY dollar index.
Click below to explore our new Refinery Margins Report, offering a clear, detailed analysis of weekly and monthly shifts in key regional refinery margins. This report enables readers to pinpoint where margins are tightening or loosening across regions, drawing on proprietary yields and our leading market share in swaps to build a world class financial refinery margin—essential for understanding the evolving landscape of regional refinery economics.
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch. Click on the relevant button below to access your COT report.
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. The week ending 06 Jan saw an increase in net positioning with a rise in bullish sentiment. Net positioning for the total collection of futures climbed from -59k on 9 Dec, flipping positive to 5k by 06 Jan. We have seen that total net positioning has been increasing steadily since the start of December, recorded at -106k on 03 Dec. This week, we saw significant strength across the futures contracts, with WTI seeing a particularly high increase w/w from -10k to 5.6k while Brent followed close behind, increasing from -12k to 1.6k. RBOB futures remained the lowest on the positioning model, moving up from -24k on 31 Dec to -12k by 06 Jan.
On Monday, the front-month March 2025 Brent contract moved higher to trade just under $77.50/bbl at the time of writing. Some of the recent buoyancy in crude prices stemmed from the strength in physical Middle Eastern and Asian markets, with
This report covers the correlation in daily returns (on different rolling window periods) between the main energy contracts listed on the ICE and NYMEX exchange and the S&P 500 and the DXY dollar index.
Click below to explore our new Refinery Margins Report, offering a clear, detailed analysis of weekly and monthly shifts in key regional refinery margins. This report enables readers to pinpoint where margins are tightening or loosening across regions, drawing on proprietary yields and our leading market share in swaps to build a world class financial refinery margin—essential for understanding the evolving landscape of regional refinery economics.
The front-month (Feb’25) Brent is on track for a weekly decline, as price action has fallen by 2% to $72.50/bbl by 13:30 GMT (time of writing). Various factors have pressured crude prices this week, including more hawkish signals from the
This report compares and contrasts the Bloomberg survey of ICE Brent and NYMEX WTI forecast to their high/low range as well the forward curve
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch. Click on the relevant button below to access your COT report.
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
Update to Onyx Global Oil Balance: this update’s key revision revolves around supply, with lower non-OPEC supply growth in 2025 and an upward readjustment in Iraqi crude production following methodological changes by Petro-Logistics SA. Following a comprehensive review of Iraq’s crude balance, Petro-Logistics SA has reclassified “other” refinery feedstocks as crude oil, accounting for most of the revision in the country’s output.
This report contains Onyx Advisory’s Global Oil Liquids Balance, with projections of world oil supply (including OPEC crude oil production) and world oil demand to derive implied global oil stock changes by quarter.
The report is split into two parts: a detailed global balance on page 3 and a summary balance on page 4, which shows individual OPEC country crude production assumptions over the forecast period. The OPEC crude production level is contrasted with the ‘Call on OPEC’ crude to obtain the implied global stock change.
Historical data are sourced from the IEA, while Petro-logistics SA data are used for OPEC crude production.
The front-month (Feb’25) Brent futures contract has seen a supportive performance in the past week, rising to highs of $74.50/bbl on 13 December – but has come off to the $74/bbl level on 16 December (time of writing). This week,
The Feb’25 Brent Futures contract experienced a weaker morning session, trading down from around $74.20/bbl at 07:00 GMT to $73.94/bbl at 10:35 GMT (time of writing) as traders take profit and await the Fed’s interest rate decision, with market expectations of a 25bp cut. In headlines Libya’s largest refinery, Zawiya (120 kb/d capacity), suffered fires over the weekend caused by gunfire during armed clashes, prompting the NOC to declare force majeure on Sunday. While the fires were controlled by Monday, the force majeure remains in place amid urges for the government to end clashes to prevent further damage and potential loss of life. This incident underscores ongoing risks to Libya’s oil industry, despite recent production gains, with output reaching 1.59 mb/d in October after resolving earlier political disputes and blockades. In other news, China’s refined oil consumption peaked in 2023 at 399 million metric tons (approximately 8 mb/d) and is projected to decline by 1.3% in 2024, according to CNPC’s Economics & Technology Research Institute. This decline is largely attributed to the rapid expansion of the EV sector, with forecasts suggesting that by 2035, EVs will make up half of the country’s car fleet, alongside increasing adoption of alternative fuels for trucks. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent spreads are at $0.38/bbl and $1.68/bbl, respectively.
This report covers the correlation in daily returns (on different rolling window periods) between the main energy contracts listed on the ICE and NYMEX exchange and the S&P 500 and the DXY dollar index.
Click below to explore our new Refinery Margins Report, offering a clear, detailed analysis of weekly and monthly shifts in key regional refinery margins. This report enables readers to pinpoint where margins are tightening or loosening across regions, drawing on proprietary yields and our leading market share in swaps to build a world class financial refinery margin—essential for understanding the evolving landscape of regional refinery economics.
Iran v Israel, again On Monday, we forecast that the front-month Brent futures contract would end the week between $71 and $74/bbl. As of Friday, 8:30am GMT (time of writing), the contract is trading at around $73.60/bbl, well within this
he Feb’25 Brent futures contract strengthened this morning from $73.45/bbl at 07:00 GMT up to $74.10/bbl around 10:50 GMT (time of writing). Crude oil prices saw support amid reports that Russia attacked Ukrainian energy facilities this morning, targeting power substations and gas infrastructure, industry sources told Reuters. In the news today, Russian forces are advancing towards the Ukrainian city of Pokrovsk, now focusing on consolidating control of the Donetsk region in eastern Ukraine where Russia occupies over 60% of the territory, as per Reuters. In other news, Canadian oil producers plan to hike output next year, with Cenovus setting a growth target of 4.4% between 805kb/d and 845kb/d, driven by the start-up of the Narrows Lake oil sands project. Suncor also aims to boost production in 2025 by 4.4% to between 810kb/d and 840kb/d. Finally, Nigeria’s Seplat Energy is set to revive hundreds of Exxon’s idle Nigerian oil wells after completing its purchase of Exxon’s onshore oil and gas assets in the West African nation, according to Bloomberg. Seplat plans to increase oil output by 200kb/d, with CEO Samson Ezugworie stating in a Thursday interview that only 200 of around 600 blocks are currently producing. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.37/bbl and $1.58/bbl, respectively.
This report reviews weekly oil inventory data from the US EIA’s Weekly Petroleum Status Report, Global Insights’ ARA Independent Storage and International Enterprise’s Singapore product storage
The report covers oil inventory data in the OECD held by industry in million barrels and days of forward demand, as provided by the International Energy Agency
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch. Click on the relevant button below to access your COT report.
This report contains Onyx Advisory’s Global Oil Liquids Balance, with projections of world oil supply (including OPEC crude oil production) and world oil demand to derive implied global oil stock changes by quarter.
The report is split into two parts: a detailed global balance on page 3 and a summary balance on page 4, which shows individual OPEC country crude production assumptions over the forecast period. The OPEC crude production level is contrasted with the ‘Call on OPEC’ crude to obtain the implied global stock change.
Historical data are sourced from the IEA, while Petro-logistics SA data are used for OPEC crude production.
Instability in the Middle East The front-month (February 2025) Brent futures contract weakened below $71/bbl on 06 Dec, dipping under the boundary of the symmetric triangle within which the M1 futures contract has oscillated since September (attached). As of Monday,
Click below to explore our new Refinery Margins Report, offering a clear, detailed analysis of weekly and monthly shifts in key regional refinery margins. This report enables readers to pinpoint where margins are tightening or loosening across regions, drawing on proprietary yields and our leading market share in swaps to build a world class financial refinery margin—essential for understanding the evolving landscape of regional refinery economics.
Aramco bought Midland in the window. Wow, why are the Saudis buying crude in the North Sea? Not Aramco, says a Saudi source, getting technical. The deal was done by Aramco Trading, ah, we get it, the other arm of the same one. 🤣 Juicy, unusual bits always pique our interest. Our sources report the cargo is going to Denmark’s Kalundborg refinery.
Meanwhile, our Indian friends report continued buying interest despite high prices. State linked refineries freaked out with Biden’s sanctions and tried to cover too early, leading to the previous surge. Apparently, the Chinese acted faster putting some state buyers in a bind. And after shipping sanctions, the Indian state companies are bidding for long term supply with freight included. But sources in the know think long-term deals will be done without the freight component.
The North Sea physical differential strengthened above $0.80/bbl last week but has since petered out, dropping to $0.69/bbl on 20 Jan. 20 Jan also saw five offers for WTI Midland in the window from Eni, Unipec, Shell and two offers from Gunvor, who interestingly was buying cargoes before this. We saw no bids in the window for the first time since 3 Jan.
The Mar’25 Brent futures flat price clawed higher on Tuesday afternoon, rising from $78.50/bbl at 14:00 GMT to nearly $79.60/bbl by 16:45 GMT before falling to $79.16/bbl by 17:40 GMT (time of writing). In the news, a rare winter storm across the U.S. South has disrupted natural gas and oil production, strained the Texas power grid, and halted LNG exports. Despite the Houthis’ announced pullback, insurers remain reluctant to cover Red Sea transit due to ongoing security risks, delaying a full return to the Suez Canal route and keeping freight rates elevated, though a gradual decline is expected. Trump’s tariff threats on Canadian oil have widened the gap between U.S. and Canadian energy stocks, with Toronto-listed names underperforming as investors shy away from policy uncertainty, while analysts warn of further downside if tariffs are implemented. Serica Energy remains committed to investing in the UK North Sea despite high taxes, seeing opportunities in the market, but emphasises the need for a more sustainable tax regime to support long-term oil and gas development. U.S. energy mergers may slow in 2025 as deal sizes shrink due to fewer available targets and regulatory delays, but smaller and mid-cap producers are still expected to pursue M&A for scale, with cost-saving measures like longer laterals helping to improve drilling economics. Finally, the front (Mar/Apr) and 6-month (Mar/Sep) Brent futures spreads are at $0.81/bbl and $4.05/bbl respectively.
The Mar’25 RBOB futures outright price reached above the upper Bollinger band on 15 Jan to a high of $2.20/gal and has since corrected to $2.14/gal on 21 Jan. The cracks have been fairly robust, and the Mar’25 RBOB futures crack (RBBR) has been gaining strength slowly this month as it rose from seeing support at the lower Bollinger band on 10 Jan to seeing some trepidation at the 20-day moving average on 20 Jan, although it broke past this on 21 Jan, to $10.35/bbl at the time of writing.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in distillates, gasoline, and LPG swaps. Our weekly Onyx Alpha report presents speculative and hedging trades based on technical analysis and data-driven tradecraft methods on Onyx Commitment of Traders (COT) and Flux Financials data.
The oil market is falling and heading to a first stop in the 77-78 level as it has become clearer that the new US administration does not want high prices. There is a risk prices may fall further as more members of the trading community say the shipping market is finding workarounds. Several freight indices have already fallen, compounded by the Houthis becoming less aggressive. As more oil can flow more easily, oil in floating storage can reduce, increasing supply and leading to lower prices. Talk of low 70s by Trump’s mid-term have already surfaced.
The Mar’25 Brent futures contract has been on a downward trajectory since hitting an overnight peak of around $80.45/bbl at 0220 GMT, trading steadily down to $79.00/bbl at 1050 GMT (time of writing). Crude oil prices saw bearish sentiment after US President Trump declared a national energy emergency yesterday as part of his plan to boost domestic oil and gas production. In his first day in office, Trump signed an executive order repealing Biden’s efforts to block oil drilling in the Arctic and US coastline, also stating he intends to fill the SPR “right to the top”. In addition, Trump ordered the US withdrawal from the Paris climate deal and suspended new federal offshore wind leasing. In the news today, President Trump said he planned to impose previously threatened tariffs of as much as 25% on Mexico and Canada by Feb 1, due to the fact “they’re allowing vast numbers of people” into the US, as per Bloomberg. In other news, Indian refiners MRPL and Bharat Petroleum Corp issued tenders this week seeking crude oil after US sanctions on Russian crude. MRPL issued its first crude import tender in more than a year, seeking offers of 1-2mb to be delivered 16-28 Feb, open to offers of both sweet and sour crude, as per Reuters. Meanwhile, BPCL is seeking 12mb of Abu Dhabi’s flagship Murban crude in an annual tender, planning to buy 1mb per month from April 2025 to March 2026. Finally, at the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.86/bbl and $4.17/bbl, respectively.
Dear long trader, pay attention to what Trump is saying. He will declare an energy national emergency and ‘bring prices down.’ He will open vast tracts of land for oil and gas exploration and withdraw the country from the Paris accord. In a lastminute U-turn, Trump will reportedly not implement China-specific tariffs from day one of his presidency. And markets were relieved to say the least. The news sent Brent flat price tumbling almost $1.50/bbl, before finding support around the $79.50/bbl, but Brent closed at $79.77/bbl. The window was well offered, with Eni, Unipec, Gunvor and Shell all offering up CIF Midland cargoes, but no buyers were interested. Even Gunvors early Feb cargo offered at Dated +$1.50 wasn’t enough to tempt anyone.
The Mar’25 Brent futures contract started to recover this afternoon, strengthening around 50c since this morning up to $80.93/bbl at 1325 GMT. However, Brent flat price then sold-off at US open (1330 GMT) down to $79.45/bbl around 1400 GMT, retracing to $80.08/bbl at 1750 GMT (time of writing). Crude oil prices have continued to decline as traders anticipate policy announcements from US President Donald Trump, including plans to boost domestic oil production and resolve the Russia-Ukraine conflict. In the news today, Chinese crude imports from Russia rose by 1% y/y to a record high of 2.17mb/d, data from the Chinese General Administration of Customs showed. Higher imports from Russia potentially demonstrate Chinese refiners’ appetite for cheap cargoes amid weak refining margins. Meanwhile, crude imports from Saudi Arabia dipped by 9% y/y to 1.57mb/d. In other news, Chevron has expressed interest in oil and gas exploration offshore Greece, the Greek Ministry of Energy and Environment stated today. Greece said that it would imminently announce an international tender and decide on the particular area designated for exploration this week. Finally, the cost to hire an oil supertanker on key routes to China has doubled since the newly imposed US sanctions on Russia, as per Bloomberg. Daily rates for VLCCs on the Middle East-to-China route (TD3C) surged 112% to $57.6k in the week to 17 Jan, while rates on the US Gulf-to-China route (TD22) soared 102% to around $55.5k. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.99/bbl and $4.70/bbl, respectively.
In the week to 20 Jan, the Mar’25 Brent futures saw a narrow trading range, with prices correcting from overbought levels, closing at $80.50/bbl as bullish momentum slowed (RSI dropped from 84 to 66). Open interest declined sharply, likely due to profit-taking and hesitancy ahead of President Trump’s inauguration.
Every trader worth his/her salt in Asia is ready to put on an all-nighter. They all have expressed a view, a spread here and there. And they will wait for Trump’s executive orders hoping he makes gold for them. What a life expecting for the unexpected. We say Trump does not want a high flat gasoline price that will harm his voters.
The window was another strong showing from Totsa, bidding relentlessly, and getting whacked by Unipec, Reliance and PetroChina. Idemitsu were also back bidding Dubai. But the incessant smacking from the sellers was just enough to start chipping away at the monstrous premium Dubai has amassed since the New Year. The Dubai physical premium, which reflects the premium of Dubai partials (currently for March Delivery) over the second month Dubai swap (currently March expiry) eased 30c relative to Friday, at $4.79/bbl. This is still the 2nd highest premium since the inception of this publication.
In the week ending 14 January, money managers got longer in Brent but reduced length in WTI futures. Combining both crude futures benchmarks, money managers had a risk-on week as they added 31.7mb (+5%) in longs and 15.0mb (+11.6%) in shorts. Given the larger proportional increase in shorts, the long:short ratio was pressured down from 4.82:1.00 to 4.53:1.00 w/w (54th percentile for all weeks since 2013). In contrast, their net positioning increased from 492mb to 508mb w/w, marking a third consecutive week of increase and the highest level since April 2024.
The Mar’25 Brent futures contract has been on a decline since 16 January, continuing to fall this morning from just under $80.70/bbl at 0610 GMT down to $80.17/bbl at 0955 GMT, before recovering to $80.40/bbl at 1045 GMT (time of writing). Bearish sentiment in crude oil prices was driven in part by official data showing an average 1.15mb/d surplus in China’s crude oil inventory levels for 2024, up from 760kb/d in 2023, according to Reuters. In the news today, President-elect Trump is due to be sworn in as the 47th president of the United States this afternoon. Trump is expected to sign around 100 executive orders during his first days in office, which could include opening up federal lands to drilling and energy exploration. In addition, Trump is preparing to declare a national energy emergency as part of his plan to boost domestic energy production and reverse President Joe Biden’s climate change policies, as per Bloomberg. In other news, the director general of Turkish Petroleum, Ahmet Turkoglu, stated that the company is ready to invest billions in developing offshore oil fields in Libya, speaking at the Libya Energy and Economic Summit in Tripoli. Turkoglu stated the funds could be invested in exploring new blocks and improving the performance and efficiency of current fields. Finally, a gasoline tanker exploded in north-central Nigeria in the early hours of Saturday, with the death toll estimated at 86. The blast happened near the Suleja area of Niger state after gasoline was attempted to be transferred from a crashed oil tanker into a truck using a generator, according to Bloomberg. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $1.14/bbl and $5.13/bbl, respectively.
The Mar’25 Brent futures contract weakened further this afternoon, falling from $81.35/bbl at 1200 GMT down to $80.57/bbl at 1600 GMT, before recovering to $81.15/bbl at 1755 GMT (time of writing). Crude oil prices have faced some downward pressure as geopolitical tensions in the Middle East ease, following Israel’s security cabinet’s approval of the Gaza ceasefire deal. In the news today, China’s oil refinery throughput in 2024 saw its first decline in over two decades excluding 2022, as refineries scaled back operations amid stagnant fuel demand and weak margins. Throughput dropped 1.6% year-over-year to 14.13 million barrels per day. In other news, a Reuters review of US sanctions showed six Russian oil tankers still under construction were included, the first time Washington is known to have banned tankers before they set sail. In addition, Russia’s exports of refined oil products fell by 9.1% y/y in 2024 to 113.7 million metric tonnes amid drone attacks on refineries and export bans. Finally, Italy’s natural gas consumption fell for a third consecutive year in 2024, dropping by 2.5% to the lowest level in more than 15 years, power market manage GME stated. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $1.21/bbl and $5.37/bbl, respectively.
Flat price slipped on the headline that Israel’s cabinet had voted in favour of accepting the ceasefire. But it didn’t budge too far. Any longs hoping geopolitical risk premia would bump up prices would have needed plenty of patience, so we doubt there were many left. Overall, the market seems to be holding its breath, waiting to see what Mr T has in store for his inauguration day. We can’t blame it, as he’s got a history as something of a loose cannon when it comes to oil prices. Legions of analysts and consultants are likely to be watching his social media feeds like hawks, attentive to any publications.
In High Sulphur Fuel Oil (HSFO), the 3.5% barge complex weakened into the new year. The Feb/Mar’25 3.5% barge spread dropped from $4/mt on 27 Dec to a contango of -$1/mt on 14 Jan. While this contango was short-lived, the spread remains pressured and was seen at $1.25/mt on 17 Jan (at the time of writing). Coupling this with a stronger crude, the Feb’25 3.5% barge crack fell from -$5.60/bbl on 27 Dec to -$7.70/bbl at the time of writing. The crack has also seen significant sell-side interest from trade houses (who flipped from being net buyers on 8 Jan), end users, hedge funds and banks. In Asia, the Feb/Mar’25 Singapore 380 cst spread softened at the start of the year but rallied from $2/mt on 7 Jan to $7.50/mt on 17 Jan amid increased trade house and major buying. Accordingly, the Feb’25 380 East/West (380 vs 3.5% barges) surged up to $25.75/mt on 17 Jan. The differential between 180 cst and 380 cst fuel oil (Visco) in Feb’25 declined from $8.25/mt on 3 Jan to $6.50/mt on 17 Jan (at the time of writing).
Anyone fancy $5 physical premium? Dubai certainly did, as it jumped to $5.09, from $4.70 yesterday, a stratospheric rise from below $1 just a month ago! Even with those extreme premia, Totsa’s happy to scoop up as much Middle Eastern crude as it can manage, racking up yet more trades in the Dubai window. But it was Idemitsu that got the reward today, earning itself a convergence with the sharpshooting Vitol to bag an Upper Zakum cargo. Are the Japanese short? Although it was Vitol converging with Idemitsu, Unipec retained its position at the head of affairs on the sellside, doing the lion’s share of the work across from the ever-enthusiastic Totsa. The week that Europe sleeps, it’s all going on in Asia.
The Mar’25 Brent futures contract has seen gradual weakness this morning, declining from just under $81.90/bbl at 0520 GMT down to $81.65/bbl at 1055 GMT (time of writing). In the news today, Yemen-based Houthis have signalled a pause in their months-long attacks on commercial ships following the Gaza ceasefire deal, as per Bloomberg. Houthi leader Abdulmalik Al-Houthi stated that the group would follow the stages of implementing agreement, but also that they are ready to provide military support to Palestinians in the event of “any Israeli breach, massacre, or siege”. In other news, Indian Oil Corp has bought 7 mb of spot Middle Eastern and African crude to replace sanctioned Russian crude, including a rare 2mb purchase of Abu Dhabi’s Murban crude sold by Totsa, according to Reuters. Other purchases included Nigeria’s Agbami and Akpo crude and Gabon’s Rabi Light. Meanwhile, OPEC’s share in India’s crude oil imports in 2024 increased to nearly 51.5% from 49.6% in 2023, rising for the first time in nine years, as per Reuters. Finally, China’s GDP expanded by 5.4% y/y in Q4’24, surpassing market forecasts of a 5.0% rise and accelerating from 4.6% growth in Q3’24. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $1.37/bbl and $5.69/bbl, respectively.
Mar’25 Brent futures saw oscillating price action this afternoon, increasing from $81.20/bbl at 1230 GMT to nearly $82.00/bbl at 1425 GMT, before falling to $80.45/bbl at 1630 and recovering to $81.45/bbl at 1745 GMT (time of writing). In the news today, a strategic cooperation agreement between Russia and Iran will not include a mutual defence clause like those Russia has signed with North Korea and Belarus, according to TASS citing an Iranian envoy. In other news, advisers to President-elect Donald Trump are readying a wide-ranging sanctions strategy to facilitate Russia-Ukraine diplomacy in coming months while at the same time squeezing Iran and Venezuela, Bloomberg reported. One set of policy recommendations suggested good-faith measures to benefit sanctioned Russian oil producers, on the condition that an end to the Ukraine war is in sight. Meanwhile, a second recommendation proposed to ramp up pressure by building on the sanctions. In addition, Scott Bessent said the US is poised to increase sanctions on Russian oil companies to force them to the negotiating table with Ukraine, according to Financial Times. Finally, BP plans to cut some 4,700 jobs and 3,000 contractor roles this year to reduce costs, the supermajor told Reuters. These cuts would be equal to around 5% of the global workforce of around 90,000 employees at BP, aiming to cut at least $2 billion in costs by 2026. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $1.40/bbl and $5.72/bbl, respectively.
As energy inflation is no longer his problem, Biden is happy to put as many obstacles before Trump 2.0 as possible and is deciding now, to really crack down on Russian energy revenue. On Friday, prompt Brent reached $80 per barrel for the first time since October, as new sanction measures were announced. The measures against Russia include sanctions on Gazprom Neft and Surgutneftegas, and the blacklisting of 183 vessels involved in Russian energy exports. Sanctions have been dictating the strength as players may not want short risk as Trump heads into office with all tariff threats outstanding. In an ironic act of God, a cold Russian air mass may be out to seek revenge on the US energy infrastructure. The Siberian Express is chugging down into the lower 48, and the strong Canadian pressure is pushing this bitter cold, low, dry air into the Rockies and straight to Texas. Weather forecasts are as varied as they are confusing, but the freeze is heading south, and the whole state may freeze.
The foreboding fears of Trump’s assault on free trade and the transport of oil around the globe, supplemented by Biden’s last minute sanction splurge, have added a hefty premium to the cost of crude. Just look at the flat price chart! We’ve seen it across grades. Having pumped up Brent flat price by $8 in the past month, and with global oil demand of around 103 mil b/d, that adds upwards of $800 million per day to the world’s oil bill! The poor consumer and struggling economies will obviously have to foot the bill, as they always do . This straight up money leakage from the importing nations to the producers is almost a global ‘war tax’ placed by the US on the rest of the world and a transfer of money from consumers to producers. Saudi sources have expressed their gratitude to the US as their budgets are now and finally looking good – higher prices mean higher revenues, thanks Biden! The US’ actions have played directly into producers’ hands by pummelling the consumers.
Get ready for $5 premia! Dubai just won’t stop! Its physical premium jumped to $4.70 today, from $3.77 yesterday. We don’t have enough exclamation marks to communicate that! This has dragged up the average physical premium in January trading to $2.42 – it was $2.19 yesterday and only $1.08 in December. The only way for Dubai was up again! In just one week, Dubai has gained over $8/bbl, making more than a 10% weekly rise.Totsa’s not slowing down just yet, it’s got to tighten the screw some more. It keeps hoovering up yet more partials, no matter how strong Dubai gets. Towards the end of the window, sellers were pouring offers onto the table and Totsa was just piling them into its bulging swag bag. Unipec was again the biggest provider to Totsa, though Reliance pulled its weight too, and PetroChina sold a few as well. Vitol seemed happier sniping bids and picked off plenty from Idemitsu. The numbers on the buyside were sparse, but Totsa and its January sidekick Idemitsu made up for their isolation with good old-fashioned enthusiasm. Totsa’s also topping up on Al-Shaheen from QatarEnergy, which handed over two cargoes at premiums of $3.70-$3.80. Thirsty! There hasn’t been much Al-Shaheen in the window – it’s just been Oman and UZ.
After seeing weakness overnight, the Mar’25 Brent futures contract has continued to decline on Thursday morning, falling from $82.25/bbl at 0700 GMT down to $81.68/bbl at 1050 GMT (time of writing). In the news today, South Korea’s industry minister Ahn Duk-geun said the country is looking to import more US oil and gas to diversify energy sources and ensure stable supplies given tensions in the Middle East. This came as Israel intensified strikes on Gaza overnight only hours after a ceasefire and hostage release deal was announced on 15 Jan, with Israel’s acceptance of the deal remaining unofficial until it is approved by the country’s security cabinet, as per Reuters. In other news, Russia claimed it damaged ground infrastructure of one of the largest natural gas storage sites in Ukraine’s Lviv region, while Ukraine said gas flows were uninterrupted, according to Bloomberg. Russia’s Defence Ministry stated on Telegram that the strikes early Wednesday were in response to Ukraine’s use of US and British missiles on Russian territories. Finally, spot premiums for Middle East crude rose to their highest in more than two years amid strong demand from China and India, seeking alternatives to sanctioned Russian crude. QatarEnergy has more than doubled its price for al-Shaheen crude oil loading in March to $3.81/bbl above Dubai quotes. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $1.38/bbl and $5.61/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.
The Mar’25 Brent futures contract saw steady strength this afternoon, rising from just over $80/bbl at 1200 GMT up to this afternoon’s high of $81.60/bbl at 1630 GMT, moderating to $81.40/bbl at 1745 GMT (time of writing). EIA stats released at 1530 GMT for the week ending 10 Jan showed a lower-than-expected draw of 1.96mb in US crude oil inventories. In the news today, Israel and Hamas have agreed to a Gaza ceasefire deal, centred on the release of Israeli hostages for Palestinian prisoners, as per Bloomberg. The deal outlines a six-week initial ceasefire phase and includes the gradual withdrawal of Israeli forces from Gaza, according to Reuters. In other news, Russia targeted Ukrainian gas infrastructure and other energy facilities today, with President Zelenskyy claiming Russia launched over 40 missiles during a morning attack and more than 70 drones overnight. Ukraine’s oil and gas company Naftogaz said there were no outages and “gas supplies to population were uninterrupted”, while the Russian Defence Ministry claimed their attacks successfully hit all designated targets on energy facilities. Finally, OPEC has released its latest Monthly Oil Market Report, forecasting global oil demand to expand by 1.4mb/d in 2025. OPEC projects OECD oil demand to grow by about 0.1mb/d while non-OECD is forecast to increase by 1.3mb/d, with this rate of growth expected to continue in 2026. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $1.27/bbl and $5.34/bbl, respectively.
The US LPG market has seen a strong start to the year amid colder-than-expected weather. A rally in natural gas futures following Christmas lent support to LPG, with the Feb’25 Mont Belvieu TET propane (C3 LST) rising from under 80c/gal on 30 Dec to 92.375c/gal on 15 Dec (at the time of writing).
Good news at last! Hamas has apparently agreed to the terms of a ceasefire with Israel, with Israel set to vote on the deal tomorrow. This would see Israel and Hamas exchange hostages and prisoners and hopefully bring an end to the most damaging conflict the region has seen in years. We hope this delicate peace holds. We like peace 😊
The North Sea was peaceful too. BP was at it again, coming in early to bid for more Sverdrup in the window – can’t fault them for enthusiasm! However, no sellers were tempted out of the woodwork and the British major went home empty handed, no matter how quickly it raised its bids. Totsa joined in alongside BP but was less fortunate than in the Dubai window, with the absence of sellers.
Brent fought tooth and nail to hold onto the $80 handle for much of the Asian session and built up towards the mid-$80 level by the time European traders were rubbing the cobwebs from their sleepy eyes. There was a sense that the flat price had risen too much. Sources expected longs to pare back positions leading to a retracement but probably only towards $78. “It is good to be long ahead of Trump’s inauguration,” said a source. Another wondered if Biden would fire more sanctions but concluded there wasn’t time for more mess and mayhem before January 20th. Brent quickly fell from its $80.63/bbl peak at 07:45 GMT to below $80 before 09:00. But nothing sticks for long and flat price was soon jumping back above $80.
The Mar’25 Brent futures flat price had a volatile morning on Wednesday. It rose to highs of $80.46/bbl at 07:46 GMT before falling to lows of $79.63/bbl at 09:30 GMT and climbing again to $80.33/bbl by 10:18 GMT. Brent has been testing the $80/bbl level since Tuesday, and the intra-day low marks the lowest level reached this week. In the news, the U.S. sanctions on over 150 “shadow fleet” oil tankers have disrupted the seaborne oil trade, halting deliveries of 16 million barrels of crude and refined products from Russia, Iran, and Venezuela, while driving up tanker freight rates and creating uncertainty in global oil logistics. With China and India likely to pivot to alternative suppliers in response, the sanctions have tightened the tanker market, pushing VLCC rates up by 63% since early January. Trump’s proposed 25% tariffs on Canadian oil are pressuring Canadian crude prices and energy stocks, with analysts warning of further downside risks for producers reliant on US exports. Shell and CNOOC’s joint venture plans to invest $8.35 billion to expand its Guangdong petrochemical complex by 2028, adding a third ethylene cracker and facilities for specialty chemicals to serve China’s domestic market. California withdrew its EPA waiver request to mandate zero-emission trucks, anticipating rejection from the incoming Trump administration, a move that impacts other states adopting similar standards and reflects ongoing tensions over emissions regulations. Tengizchevroil has completed maintenance at Kazakhstan’s Tengiz field, with full production resuming by January 18. Finally, the front (Mar/Apr) and 6-month (Mar/Sep) Brent futures spreads are at $1.05/bbl and $4.46/bbl respectively.
The Mar’25 Brent futures contract saw some weakness this afternoon, declining from almost $80.90/bbl at 1200 GMT down to $80.15/bbl at 1800 GMT (time of writing). In the news today, Kaja Kallas, the EU’s foreign policy chief is now pushing for the European Union to lower the $60/bbl price cap on Russian oil, Kallas told Bloomberg in an interview. In other news, swarms of Ukrainian drones attacked energy and military facilities across central Russia and the Volga region overnight, according to a Ukrainian Security Service official. Drones set Rosneft’s PJSC Saratov oil refinery on fire as well as two chemical plants in the Tula and Bryansk regions, according to Bloomberg. Finally, Peru’s Bretana crude oil is gaining popularity in the US, with the first cargo discharging in the US Gulf Coast this month as US refiners seek alternatives to Mexican heavy crude, as per Reuters. Kpler and LSEG ship tracking data showed a vessel transported about 300kb of Bretana from Brazil to Houston on 2 Jan, with the cargo bought by oil major Shell. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $1.11/bbl and $4.76/bbl, respectively.
Nothing escapes the law of gravity, but the M1 Brent/Dubai has done much more than that, falling just shy of a low last registered in November 2023. As we write this, the front-month Brent/Dubai has fallen to -$0.80/bbl, having been at +$0.21/bbl on 8 Jan.
The naphtha complex rebalanced amid mass stop-outs and heavy selling into the cracks, which saw huge pressure in both regions. Stronger crude pressured the cracks alongside weaker demand estimates in the East and clear refiner selling in MOPJ flat price which spooked the market. The East retained strength slightly more as the E/W saw a huge rally in January. The physical market in Europe has been very weak, but both regions seem to have reached a bottom. Keep an eye out for better support here for something for bulls to bite on to.
We’ve heard on the grapevine that the US state department was chinwagging with certain majors to discuss the market’s state ahead of unleashing sanctions. The US wanted to make sure that excess supply they see in the market was accurate, and taking out Russian and Iranian barrels would not lead to runaway oil prices. According to our source, the market perceived excess capacity to be sufficient to mitigate any significant shortage, with the usual overproducers filling the gaps (without naming any names – we know it’s all about omertà 😊). This advance warning helps explain the leaked embargo document. That same privileged information may have even led to early buying by some ahead of the official announcement of sanctions on Friday, when things went bananas. The moral hazard involved with canvassing entities with an innate commercial interest is clear 🤦♂️. As soon as the US state department is on the phone asking about the effect of sanctions, it’s time to get buying. Even so, the market feels like it’s in limbo, waiting to see what Trump has in store. Traders from China and the US we spoke to expect China and India to keep going for WAF and Latam grades until the incoming administration’s stance on sanctions becomes clear.
Oil prices closed last year with a bounce in their step, and Brent pursued its ascent into the new year to trade above $81/bbl at the time of writing. 2025, in China’s astrological calendar, is the year of the Snake, typically associated with wisdom, adaptability and transformation. The oil market will have to grapple with all three with the outcome of the US 2024 presidential election. The victory of Donald J. Trump promises to shift global economic, geopolitical and oil fundamentals tenets. Mr Trump will be inaugurated as the 47th president on 20 January, and right out of the gate, we can expect a flurry of new policies driven by executive orders that the market will need to process. This promises heightened price volatility initially, but the market will adapt, and past relations will transform and yield new ones. One can only hope that wisdom will guide how the oil market actors react during this process. In the meantime, the parting gifts of the Biden administration through additional severe sanctions on Russia will keep oil prices on a positive footing.
The North Sea Dated Brent market continues to strengthen into mid-January. The market was already trending higher on robust fundamentals, including US weather risk and an open arb between Europe to Asia, but the Russia sanctions headlines have supported Brent spreads and accelerated the rally. Currently, there are no real axed sellers, and the market has displayed a clear herdy trading mentality.
