Our latest energy derivatives stories across the World.
In this publication, we leverage Onyx’s proprietary Commitment of Traders data in order to identify changes in swap Open Interest and Positioning against Onyx with a view, in conjunction with long/short entry price levels and volatility analysis to identify potential continuation or reversal trends.
In this seventh edition, we take a look at the May’25 Sing 92 Crack swap.
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
This report aims to provide a position index for energy futures between -50 and 50, with 0 as the neutral position. The full methodology is at the back of the report. When the position index is at the extremes, above 40 or below -40, the market is overstretched relative to its average position in the previous 3-year rolling window. As such, it is ripe for mean reversion. Consequently, when the index is high, deleveraging will follow, having a negative impact on price, while when the index is low, we expect accumulation that will push the price higher.
This report aims to provide a position index for energy futures between -50 and 50, with 0 as the neutral position. The full methodology is at the back of the report. When the position index is at the extremes, above 40 or below -40, the market is overstretched relative to its average position in the previous 3-year rolling window. As such, it is ripe for mean reversion. Consequently, when the index is high, deleveraging will follow, having a negative impact on price, while when the index is low, we expect accumulation that will push the price higher.
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
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
This report aims to provide a position index for energy futures between -50 and 50, with 0 as the neutral position. The full methodology is at the back of the report. When the position index is at the extremes, above 40 or below -40, the market is overstretched relative to its average position in the previous 3-year rolling window. As such, it is ripe for mean reversion. Consequently, when the index is high, deleveraging will follow, having a negative impact on price, while when the index is low, we expect accumulation that will push the price higher.
This report aims to provide a position index for energy futures between -50 and 50, with 0 as the neutral position. The full methodology is at the back of the report. When the position index is at the extremes, above 40 or below -40, the market is overstretched relative to its average position in the previous 3-year rolling window. As such, it is ripe for mean reversion. Consequently, when the index is high, deleveraging will follow, having a negative impact on price, while when the index is low, we expect accumulation that will push the price higher.
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
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks in a timelier fashion relative to the official COT data. In crude futures, Brent and WTI futures recorded a 180% and 227% decline w/w to -35k lots and -32k lots, respectively. Interestingly, net length had dropped to -37k lots and -34k lots in Brent and WTI, respectively, on 9 Apr, highlighting more support mid-week despite the overall w/w decline. In refined products, gasoil and heating oil futures fell by 138% and 116%, respectively this week to -33k lots and -23k lots. Finally, RBOB futures saw a 180% decline w/w from +3.7k lots on 7 Apr to -13.4k lots on 11 Apr.
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.
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 ETFs report, providing a detailed analysis of price movements, trading volume, and counterparty shifts in ETF underlyings, along with open interest trends in the options market. Featured funds include USO, SCO, UCO, KOLD, BOIL, and UNG. For each ETF, we offer a comprehensive breakdown of price trends, volume, open interest, and key market participants.
In this publication, we leverage Onyx’s proprietary Commitment of Traders data in order to identify changes in swap Open Interest and Positioning against Onyx with a view, in conjunction with long/short entry price levels and volatility analysis to identify potential continuation or reversal trends.
In this seventh edition, we take a look at the May’25 EBOB Crack swap.
In this sixth edition, we take a look at the May’25 Mont Belvieu TET propane (C3 LST) swap.
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
This report aims to provide a position index for energy futures between -50 and 50, with 0 as the neutral position. The full methodology is at the back of the report. When the position index is at the extremes, above 40 or below -40, the market is overstretched relative to its average position in the previous 3-year rolling window. As such, it is ripe for mean reversion. Consequently, when the index is high, deleveraging will follow, having a negative impact on price, while when the index is low, we expect accumulation that will push the price higher.
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.
Onyx’s in-house CTA positioning model determines the net positioning of CTAs in a range of futures benchmarks. CTAs initially increased their net length, which surpassed 0, and reached highs of 20k lots on 03 April. However, with flat price collapsing, CTA positions sharply reversed, falling to -88k lots by 07 April. However, outright positioning is yet to surpass the lows reached in early March. As such, there is capacity for CTAs to provide further downside to price action. RBOB remains the most bullish out of the underlyings, while Brent has become the most bearish, at -27k lots. As a result, gasoil is no longer the most bearish underlying.
Click below to explore our ETFs report, providing a detailed analysis of price movements, trading volume, and counterparty shifts in ETF underlyings, along with open interest trends in the options market. Featured funds include USO, SCO, UCO, KOLD, BOIL, and UNG. For each ETF, we offer a comprehensive breakdown of price trends, volume, open interest, and key market participants.
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.
In this publication, we leverage Onyx’s proprietary Commitment of Traders data in order to identify changes in swap Open Interest and Positioning against Onyx with a view, in conjunction with long/short entry price levels and volatility analysis to identify potential continuation or reversal trends.
In this sixth edition, we take a look at the May’25 Mont Belvieu TET propane (C3 LST) swap.
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.
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
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
This report aims to provide a position index for energy futures between -50 and 50, with 0 as the neutral position. The full methodology is at the back of the report. When the position index is at the extremes, above 40 or below -40, the market is overstretched relative to its average position in the previous 3-year rolling window. As such, it is ripe for mean reversion. Consequently, when the index is high, deleveraging will follow, having a negative impact on price, while when the index is low, we expect accumulation that will push the price higher.
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.
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 ETFs report, providing a detailed analysis of price movements, trading volume, and counterparty shifts in ETF underlyings, along with open interest trends in the options market. Featured funds include USO, SCO, UCO, KOLD, BOIL, and UNG. For each ETF, we offer a comprehensive breakdown of price trends, volume, open interest, and key market participants.
In this publication, we leverage Onyx’s proprietary Commitment of Traders data in order to identify changes in swap Open Interest and Positioning against Onyx with a view, in conjunction with long/short entry price levels and volatility analysis to identify potential continuation or reversal trends.
In this fourth report, we take a look at the Q4’25 Brent/Dubai swaps contract.
Sometimes songs encapsulate the reality show we are in. And even the name of the group, ‘Lost Frequencies,’ fits the narrative. We copy some of the lyrics: ‘Stop claiming what you own and think about the show: “We’re all playing the same game, waiting on our loan. Decisions as I go, to anywhere I flow. / Sometimes I believe, at times I’m rational. I can fly high, I can go low. / Today I got a million, / Tomorrow, I don’t know.”
The Jun’25 Brent Futures saw prices slowly rally from $65.57/bbl at 12:30 BST up to $66.86/bbl at 18:32 BST (time of writing). In the news, US refiner Phillips 66 reported a larger-than-expected first-quarter loss due to lower refining margins and major turnaround activities at its plants. The refining unit posted a $937 million loss, compared to a $216 million profit a year earlier, with realized margins falling 38% to $6.81/bbl. Crude capacity utilization dropped to 80% from 92% last year. In other news, Iraq has sent a delegation to Syria to discuss reviving an oil pipeline that once carried crude to the Mediterranean, aiming to boost trade and regional cooperation. Talks also include border security and counterterrorism. The visit follows Syria’s post-Assad transition and recent oil shipments from Kurdish-controlled areas to the new central government, supported by eased EU sanctions. Activist investor Elliott Management, holding over 5% of BP’s shares, is pushing for strategic changes, including removing strategy chief Giulia Chierchia and splitting BP’s upstream and downstream units. The activist investor wants spending cuts and reduced low-carbon investments to boost free cash flow by 40% by 2027. BP has already begun shifting back to oil and gas under CEO Murray Auchincloss but faces pressure as oil prices fall. Finally, the front month Jun/Jul and the 6-month Jun/Dec spreads are at $0.83/bbl and $2.34/bbl respectively.
High Sulphur Fuel Oil contracts saw continued strength over the past two weeks, reinforcing the market’s bullish attitude towards summer demand. The prompt 3.5% barge crack rallied up to -$1.25/bbl, while the 380 East/West (Sing 380 vs 3.5% barges) surpassed $20/mt. However, sentiment reversed following the Easter break, with selling flows seeing prices correct lower. The notable flow was selling in the Jun 380 East/West, which pressured the Jun/Jul box down from $8 to below $2/mt. In the East/West, Chinese majors were on the buy side, while trade houses and end users were on the sell side. Despite these selling flows, the front 380 cracks remain comfortably above $0/bbl. The Visco (Sing 180 vs Sing 380) saw strength as May rallied from $11 to $16/mt, supported by buying from Middle Eastern NOCs.
The Jun’25 Brent futures contract saw prices fall off from $67.00/bbl at 07:02 BST down to $65.92/bbl at 11:38 BST (time of writing). In the news, the US Interior Department has introduced new rules allowing greater pressure differences in offshore drilling in the Wilcox formation of the Gulf of Mexico. The move, led by Trump’s Energy Dominance Council, aims to boost oil output and reduce regulatory burdens. The updated downhole commingling guidelines increase the allowable pressure differential from 200 psi to 1,500 psi, potentially adding 100kb/d in output over the next decade. Russia is accelerating new oil well drilling at its fastest pace in five years, despite falling oil prices, according to Bloomberg. Activity is now 30% higher than before the Ukraine war, showing the oil sector’s resilience to Western sanctions, which aimed to cripple the industry by cutting off access to Western tech and services. Production capacity has returned to 2016 levels—between 11mb/d and 11.5 mb/d. In other news, some small US shale producers are cutting back on drilling as oil prices fall to multi-year lows and tariffs raise costs, threatening future output growth. US production is still expected to hit a record 13.7mb/d in 2025, but growth forecasts have been cut by both the EIA and IEA. Producers like Blackridge Resources and Arena Resources are delaying drilling plans due to weak prices and high costs, with some saying $60/bbl isn’t profitable in many regions. Finally the front month Jun/Jul and 6-month Jun/Dec spreads are at $0.91/bbl and $2.17/bbl respectively.
An extremely unusual event happens, common sense prevails! China intends to exempt certain NGLs and petrochemicals from its retaliatory tariffs against the US. Ethane, polyethylene and propylene are now exempt, giving some hope that propane could escape too. A Chinese source confirmed to The Officials that “PE [polyethylene] and ethane from the US are exempted, while propane is not.” The ethane exemption will help those Chinese plastic factories – but propane was the bigger of the two in terms of US exports to China at nearly 400 kb/d in December and January, while ethane was only 260 kb/d in those months. But, as one Chinese source commented to The Officials, China and US rely on each other when it comes to ethane. So, with no China demand, there is no outlet for US ethane and China has no ethane resources. Also, in Asia 2.70 we referred to the two new ethylene crackers expected to use naphtha as primary feedstock but those taking in ethane will be breathing a sigh of relief. Meanwhile, Trump said Xi had called him, after waiting by the phone for some time. And we like them talking, as it helps solve problems. Hopefully, they can keep chatting and sort the whole mess out. If the trade relationship hasn’t been entirely soured by last month’s events, perhaps these will resume as usual…
There’s no lifting the foot off the gas in the North Sea, as Trafi picked up yet another trio of cargoes. But this time it’s broadened its palate and picked up one Forties from BP – a cargo for 22-24 May at Dated +$0.85. The main dish was, however, still Midland, of which Trafi collected two from Gunvor for 23-27 and 24-28 May, both at Dated +$1.85. Nine Midland cargoes in 3 sessions, plus one Forties for good measure… that’s 7 mil bbl – equivalent to 3.5 VLCCs! Ekofisk was back on the menu too, as Mitsui bid for 12-14 May at $2 over Dated, whereupon Shell swept in to hit their bid. The physical differential slipped to $1.13.
The Jun’25 Brent Futures contract saw prices rangebound between $67.00/bbl and $66.50/bbl for most of the afternoon before falling off to $65.95 at 17:09 BST. Prices have since climbed back to $66.52/bbl at 17:43 BST (time of writing). In the news, Chevron plans to drill its first exploration well in Namibia’s Walvis Basin in 2026 or 2027, following its acquisition of an 80% stake and operatorship in Petroleum Exploration License 82 (PEL 82). The move aligns with Chevron’s broader strategy to expand its exploration portfolio in under-explored regions. PEL 82 lies north of Namibia’s Orange Basin, where Shell, TotalEnergies, and Galp have made major oil discoveries since 2022. In other news, Eni SpA reported Q1 2025 adjusted net profit of $1.6B, down 11% y/y but above expectations. Amid falling oil prices and macro uncertainty, the company will cut capital spending by up to $1.13B but will maintain its planned dividend hike and $1.7B share buyback. Shares rose nearly 2% in Milan on the news. To preserve payouts, Eni is deploying over $2.27B in cost-cutting and cash initiatives. Valero Energy posted a Q1 loss of $595 million, due to weaker refining margins and nearly $1B in impairment charges tied to West Coast assets. This compares to a $1.2B profit a year ago. CEO Lane Riggs cited heavy maintenance and weak renewable diesel margins as key challenges. Finally the front month Jun/Jul spread is at $0.89/bbl and the 6-month spread is at $2.43/bbl.
The price volatility noted in the front-month Brent futures contract has calmed this week, with prices moving sideways. We saw some weakness on 23 Apr following reports of several OPEC+ members suggesting a second consecutive accelerated oil output increase in June. However, prices only dipped from $68.65/bbl to $65/bbl on this news and have since risen to $66/bbl at the time of writing on 24 Apr. This consolidation in price action may indicate that the market may be opting to sit on the sidelines while ascertaining the developments in the oil industry and the larger macroeconomic backdrop. Uncertainty continues from burgeoning trade talks between the US and China, with Treasury Secretary Scott Bessent stressing that the trade standoff cannot be sustained. Until we await further clarity on this development, news on additional accelerated oil output rises would put further pressure on oil prices. Moreover, Kazakhstan, which produces about 2% of global oil output, has said it will prioritise national interests over OPEC+ when deciding production levels, which may possibly cause friction amid the OPEC+ members, adding to the uncertain environment. Some support for oil prices may emerge amid new US sanctions on an Iranian LPG magnate. However, the US and Iran are reportedly planning talks to negotiate a nuclear deal. Should the two parties successfully broker such a deal, it could tip oil prices right off the edge.
Divorces are rarely clean breaks and Kazakhstan’s policy split from OPEC has already been reined in. Kazakhstan isn’t in an easy position; while it can drill as hard as it likes and IOCs can extract enough oil to fill the Caspian Sea, Kazakhstan depends on neighbours for pipelines and export facilities. Remember the spat around the Caspian Sea SPMs that Russia temporarily blocked a couple of weeks ago! Suitably chastised, after his bombastic comments about prioritising national interests above OPEC’s famed disciplined compliance, he quickly ate humble pie and mumbled about commitment to the common good.
The front-month Brent futures contract continues to see resistance above $68.50/bbl, hitting this level at 09:45 BST this morning before softening a touch to $68.10/bbl by 10:50 BST. Prices regained support here, rising to $68.30/bbl by 11:20 BST, but sell-side interest finally took the contract to $68.05/bbl at the time of writing (11:40 BST). API estimates for US crude oil inventories in the week ending 18 Apr displayed a draw of 4.565mb alongside a 0.354mb decline in stocks at Cushing, Oklahoma. The market will now await the US EIA’s official inventory data, which will be out at 15:30 BST this afternoon. In other news, US Treasury Secretary Scott Bessent told a closed-door investor summit on Tuesday that the tariff standoff with China cannot be sustained and that the US and China need to find ways to de-escalate. Bessent further added that this de-escalation will come in the very near future. US President Donald Trump has further stated that he plans to be “very nice” to China in any trade talks. In other news, the HCOB German flash composite PMI, compiled by S&P Global, fell into contraction territory at 49.7 in April (March: 51.3). This downturn was driven by the service sector. While the manufacturing PMI also fell to 48.0 (March: 48.3), manufacturing output grew for the second consecutive month, albeit at a slower rate of 51.6. Finally, at the time of writing, the Jun/Jul’25 and Jun/Dec’25 Brent futures spreads stand at $0.98/bbl and $2.95/bbl, respectively.
The avalanche accelerates! Reports that yet more OPEC+ members want to expedite the return of barrels from the June release precipitated a $1.50 flat price dump back towards the mid-$65 range. Stunned and perhaps slightly dizzy, Brent managed to re-find its feet and consolidated to close the European session at $65.64/bbl. If they’re worried about their revenues and selling at low prices, it’s odd they should reveal this now that prices were well down in the 60s. Kazakhstan opened Pandora’s Box!
Major propane benchmarks witnessed substantial weakness into April 2025 – with the weakness concentrated in the Far East propane Index (C3 FEI).
The front-month Brent futures contract saw a very volatile afternoon. Prices fell by $1.96/bbl down to $65.50/bbl at15:16 BST and jumped back up to $66.74/bbl at 17.30 BST (time of writing). The nearly $2.00/bbl drop comes as Kazakhstan stirs tensions within OPEC+ by declaring it will prioritize national interests over group quotas. Energy Minister Erlan Akkenzhenov said Kazakhstan can’t cut output at major projects run by foreign firms like Chevron and ExxonMobil, which make up 70% of the country’s production. This stance clashes with OPEC+ efforts to rein in overproduction, especially after the group admitted to a 457kb/d surplus. In a further statement, Kazakhstan then said to be committed to constructive work with OPEC+, causing a $0.83/bbl jump in flatprice. In other news, Sinopec has resumed buying Russian ESPO crude for May after halting purchases in March and April due to U.S. sanctions concerns. While major Chinese refiners had paused or cut Russian imports, independent refiners continued buying. As a result, China’s crude imports jumped to over 12 mb/d in March, the highest since August 2023, with increased flows from Russia and Iran. US crude inventories unexpectedly rose by 244 kb last week as imports surged, despite forecasts for a draw. Cushing stocks fell slightly, while net imports jumped by 1.14 mb/d. Gasoline and distillate stocks dropped sharply, by 4.5 mb and 2.4 mb respectively, well above expectations. Refinery runs and utilization also increased. Jet fuel demand hit its highest four-week average since December. 2019, signalling strong product demand despite trade tensions. Finally, the front month Jun/Jul spreads and the 6-month Jun/Dec spreads are at $0.96/bbl and $2.62/bbl respctively.
“I have no intention of firing him.” We expect you can guess who’s speaking and about whom… Yes, Trump has no plans to fire the market’s darling, Powell. Not that he ever could – legally! His comments in the Oval Office last night were uncharacteristically restrained. We suppose the market’s plummet may well have whipped him into a more sober state of mind.
The front-month Brent futures contract continues to see resistance above $68.50/bbl, hitting this level at 09:45 BST this morning before softening a touch to $68.10/bbl by 10:50 BST. Prices regained support here, rising to $68.30/bbl by 11:20 BST, but sell-side interest finally took the contract to $68.05/bbl at the time of writing (11:40 BST). API estimates for US crude oil inventories in the week ending 18 Apr displayed a draw of 4.565mb alongside a 0.354mb decline in stocks at Cushing, Oklahoma. The market will now await the US EIA’s official inventory data, which will be out at 15:30 BST this afternoon. In other news, US Treasury Secretary Scott Bessent told a closed-door investor summit on Tuesday that the tariff standoff with China cannot be sustained and that the US and China need to find ways to de-escalate. Bessent further added that this de-escalation will come in the very near future. US President Donald Trump has further stated that he plans to be “very nice” to China in any trade talks. In other news, the HCOB German flash composite PMI, compiled by S&P Global, fell into contraction territory at 49.7 in April (March: 51.3). This downturn was driven by the service sector. While the manufacturing PMI also fell to 48.0 (March: 48.3), manufacturing output grew for the second consecutive month, albeit at a slower rate of 51.6. Finally, at the time of writing, the Jun/Jul’25 and Jun/Dec’25 Brent futures spreads stand at $0.98/bbl and $2.95/bbl, respectively.
Jun’25 Brent futures softened in the early afternoon to sub-$66.70/bbl at 14:56 BST before it saw better strength. Although highs of over $68.00/bbl at 17:15 BST failed to be maintained, the contract corrected to $67.90/bbl at 17:22 BST (time of writing). President Trump posted on Truth Social that he and Prime Minister of Israel, Bibi Netanyahu, are ‘on the same side of every issue.’. This follows the US hitting Iranian LPG tycoon Seyed Asadoollah Emamjomeh and his business network with new sanctions today, accusing them of moving hundreds of millions of dollars in oil and gas abroad. The move comes as nuclear talks with Tehran continue. Halliburton CEO Jeff Miller expressed a bleak outlook for Mexico’s oil sector, citing ongoing challenges as Pemex, the country’s heavily indebted state oil company, struggles with nearly $100 billion in debt and slumping production. Despite new laws to stabilise output, analysts like Fitch remain sceptical, noting that current plans lack the strategic overhaul needed for a significant turnaround. BW Energy has confirmed a major oil discovery at the Bourdon prospect in the Dussafu License offshore Gabon, estimating 56 mb of oil in place, with about 25 mb recoverable. At the time of writing, the Jun/Jul’25 and Jun/Dec’25 Brent futures spreads stand at $0.96/bbl and $3.00/bbl, respectively.
The US are feeling the strain as even Bessent reportedly said the tariff situation with China is “unsustainable” and he expects a tempering of hostilities. They haven’t caved in yet, but the cracks are beginning to show! He admitted the tariffs have suffocated trade potential so much that they operate effectively as an embargo and the markets liked it – rising from nearly $66.80 to $68 within half an hour! Equities liked it to and the S&P 500 surged 2.7%. But they quickly ran out of steam and fell back!
The Brent/Dubai complex saw a bullish shift with May’25 Brent/Dubai surpassing -$1/bbl for the first time since mid-March. In contrast to flat price, differentials were unresponsive to OPEC+ speeding up its oil output hike. The bullish catalyst was Aramco cutting its May OSP to its lowest level in four years. Short covering flows from trade houses and funds exacerbated the upwards move.
By contrast to the strong growth seen in recent weeks, in the week ending April 17th, exchange traded futures volumes fell considerably ahead of the long weekend as shown in our momentum table. After the frenetic period following Trump’s tariffs announcement, last week saw a significant risk-off move. This saw a drop of around 50% or more in most contract volumes. Gasoil contracts saw the smallest decline across all tenors.
The prompt-month Brent futures contract strengthened from $66.57/bbl at 06:55 BST this morning to $67.35/bbl at 11:00 BST before softening to $67.15/bbl at 11:25 BST (time of writing).
The front-month Brent futures contract saw more support this week, with prices climbing from $64.90/bbl on 15 Apr to a high of $68.15/bbl on 17 Apr before softening to $67.45/bbl at the time of writing. Prices notably rose above the 10-day moving average this week (orange line on the chart) for the first time since 2 Apr. Clearing this hurdle has allowed for some upwards movement while at the same time providing for a useful short-term support just above $65/bbl (which corresponds with the 61.8% Fibonacci retracement level when looking at the M1 futures’ $16/bbl low in 2020 and $138/bbl high in 2022). Longer-term support may be seen at $60/bbl, which saw critical psychological support level on 9 Apr and represented longer-term lows in 2019. Meanwhile, the first stop for resistance may be seen at the 30-day moving average (yellow line), just under $70/bbl, which dovetails with support on 5 Mar.
PetroChina had its hands full today! Of course, Vitol was back, bidding hard and lifting many PC and Reliance offers. And Gunvor returned with a vengeance, lifting offers and bidding enthusiastically too – and Exxon showed more energy than we had seen for a while on the buyside, bidding alongside the dynamic duo. This congregation is a rare sight, we must say. Alongside PC on the sellside, Reliance threw in some offers but didn’t want to plunge as deep as their Chinese counterparts. BP hit the odd bid but kept its distance for the most part. Despite the buyers’ onslaught, the Dubai physical premium slipped 12c to $1.87 – kudos PC! After this clash of the titans, PC declared another Murban cargo to Vitol – that brings the April total to 24, of which 16 have gone to Vitol. Even more impressively, PC has sold 23 of those 24! The only other was from Reliance. And Murban is clearly the favoured grade now; since 14 April, it’s the only one that’s been nominated. We also notice the absence of ADNOC, what happened there?
It was a week of de-risking and quiet in the Dated Brent crude oil benchmark amid the Easter break. The North Sea Dated Brent physical differential has been rangebound this fortnight, climbing from under $1.05/bbl on 4 Apr to nearly $1.25/bbl on 11 Apr. The differential subsequently eased off to $1.155/bbl on 17 Apr – the last trading day before the long weekend.
Oil markets were walloped following last week’s war fear inspired sudden rise. But it was clear both sides, US and Iran, want to
play nice and issue friendly statements. Nevermind that the real action is in Houthiland and surrounding waters. While bombs are
dropped on Yemen, expensive American drones are also blasted out of the sky. Should they come to an agreement, surely the
Gulf neighbors won’t want any disturbances, prices are set to get whacked.
The front-month Brent futures contract strengthened this morning, climbing from below $65/bbl around 04:45 BST to $66.75/bbl at 06:35 BST. Prices have since softened to $66.45/bbl at the time of writing (07:20 BST), although this still marks the highest level the contract has seen since 7 Apr.
While Trump and co go about their crusade sanctioneering and blocking free movement of goods and oil, their efforts seem misplaced. Sources told us the most recent target of sanctions, Shandong Shenxing Chemical Co, had already transferred its assets and is simply a shell company. He’s got the spirit to take on China, he just keeps missing the mark!
The Jun’25 Brent crude futures climbed steadily on Thursday, from around $66.20/bbl at 08:00 BST to $66.90/bbl by 13:30 BST, surpassing highs reached earlier in the morning. Prices are trading at their highest levels in two weeks, and are on track for their first weekly rise in three. New sanctions on Iranian oil exports have increased supply concerns. In the news, Russian Arctic oil exports to China have surged this month, driven by ship-to-ship transfers off Southeast Asia that help sanctioned cargoes avoid scrutiny, as Chinese refiners continue to buy despite rising costs and logistical hurdles. Russia has warned that new Estonian legislation allowing naval force against foreign vessels threatens Baltic Sea security, following Estonia’s recent seizure of a Russian-sanctioned ship from the so-called shadow fleet. A German heating oil platform saw record-breaking orders on April 9 as consumers rushed to stock up when crude prices plunged to four-year lows, highlighting price-sensitive buying behaviour in Europe’s largest heating oil market. Saudi Arabia’s expansion of refinery-integrated petrochemical units, including a new Aramco-Sinopec project at the Yasref site, is expected to further reduce naphtha exports as more volumes are redirected to steam crackers and aromatics production, with limited immediate impact on gasoline output. Finally, the front (Jun/Jul) and 6-month (Jun/Dec) Brent futures spreads are at $0.92/bbl and $2.80/bbl respectively.
Appropriately for the season, this week has been one of renewed optimism. Headline fatigue feels pretty overwhelming, but margins are healthy, inflation in the States is down, and Cushing saw a weekly draw. So, whether it’s derisking, a weaker USD or genuine optimism, we have seen a w/w improvement in Brent this week. Easter bring a well-deserved break for the market after trading with constantly moving goalposts has become exhausting. US tariffs on some Chinese goods are up to 245%, which effectively acts as an embargo.
Headlines can only go so far and the Americans can only cry wolf so many times before the market doesn’t listen anymore. Yet more threats of culling Iranian crude exports to “zero” had Brent up to over $66.70 this morning.
Even if some people are taking their foot off the gas ahead of the long weekend, that certainly wasn’t the case in this morning’s extra early Dubai window. Of course, it was Vitol making the most noise and lifting PetroChina offers all over the shop. If PC had a stall at the market, Vitol would have picked up the whole thing and walked off with it while PC’s back was turned hitting Gunvor and Totsa bids. This saw Vitol earn another 2 convergences with PC – which declared 2 Murban cargoes. But even that wasn’t enough for Vitol, which also went after Hengli and BP offers – Reliance also got caught in Vitol’s rampage. Even so, the premium slipped 10c to $1.90 today.
The front-month Brent futures contract strengthened this morning, climbing from below $65/bbl around 04:45 BST to $66.75/bbl at 06:35 BST. Prices have since softened to $66.45/bbl at the time of writing (07:20 BST), although this still marks the highest level the contract has seen since 7 Apr.
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 Jakarta futures exchange will use The Officials Brent Index (OBI) assessments to settle futures contracts. The listing is targeted to start in July 2025. Please see link: https://www.linkedin.com/feed/update/urn:li:activity:7318195273757855744/
We said in this morning’s Asia report that a 245% tariff on Chinese goods would essentially be an embargo, but now Trump reportedly wants to enforce an actual embargo. Reports suggest the US wants to negotiate over 70 nations into not accepting Chinese good shipments passing through their ports. Do not underestimate the significance of this: it would hit almost all commodity markets – copper would be whacked, petchem demand would get torpedoed and oil demand would be gravely stunted. Trump loves building walls – unfortunately this one is a brick wall in the road of economic development. The more likely result, however, is that Trump is laughed off for the ludicrous suggestion this is.
This afternoon the Jun’25 Brent Futures contract saw prices rally to $66.07/bbl at 15:44 BST before coming down to $65.57/bbl at 16:14 BST. Prices have since gained some support and are at $66.09/bbl 18:20 BST (time of writing). In the news, Turkey’s top oil refiner, Tupras, has resumed purchases of Russian Urals crude after a pause earlier this year due to US sanctions, sources told Reuters. The move comes as Urals crude prices dropped below the Western price cap to their lowest since 2023. Tupras was a major importer of Russian oil post-2022, with it making up 65% of Turkey’s oil imports through most of 2024. US crude inventories rose by 515 kb last week to 442.9 mb, despite a sharp increase in exports to 5.1 mb/d. Gasoline and distillate stocks both declined (distillates fell by 1.9 mb and gasoline by 2mb). Crude stocks at Cushing fell by 654 kb , and refinery activity dipped slightly. Crude futures rose about 1.5% following the report. In other news, the US has imposed new sanctions on Iran’s oil sector, targeting a Chinese teapot refinery and several companies and vessels involved in facilitating Iranian crude shipments. The move is part of President Trump’s renewed “maximum pressure” campaign while negotiations over its nuclear program continue. Despite sanctions, China remains Iran’s top oil buyer, using yuan and intermediaries to bypass US restrictions. Finally the front month Jun/Jul and 6-month Jun/Dec spreads are at $0.89/bbl and $2.60/bbl respectively.
The Jun’25 Brent futures contract saw another volatile morning, prices jumped by $0.85/bbl to $65.27/bbl at 09:28 BST and have since some support at $65.29/bbl at 12:00 BST (time of writing). Bloomberg reports that China is open to talks if Trump shows respect. Iran’s Foreign Minister Abbas Araghchi stated that Iran’s uranium enrichment capability is non-negotiable, rejecting any potential compromise in talks with the U.S. aimed at reviving a nuclear deal. The negotiations, which began Saturday, focus on ensuring Iran doesn’t pursue nuclear weapons in return for sanctions relief. Iran insists its nuclear program is strictly for civilian purposes like energy and medical use. In other news, Ampol, Australia’s leading fuel retailer, reported a 49% decrease in first-quarter refining margins at its Lytton refinery, dropping to $6.07/bbl from $11.80/bbl a year earlier. The decline is attributed to weakened refining margins in Singapore and the impact of Cyclone Alfred, which caused approximately ten days of lost production and increased demurrage costs due to infrastructure damage. US crude inventories rose by 2.4 mb last week, according to the American Petroleum Institute (API), defying analyst expectations of a 1.68 mb decline. This would mark a year-to-date increase of over 24 mb for US crude inventories. The Strategic Petroleum Reserve also gained 0.3mb, though levels remain far below pre-withdrawal totals under the Biden administration. Gasoline inventories dropped by 3 mb, aligning with the five-year average, while distillates fell by 3.2 mb, deepening the existing supply deficit. Cushing inventories rose by 349 kb, extending last week’s barrel hike. Finally the front month Jun/Jul spreads and the 6-month Jun/Dec spreads are at $0.82/bbl and $2.42/bbl respectively.
245% tariffs… I have a bigger stick than you. It sounds scary, but who really cares? China-US trade is already dead as a dodo and 245% would essentially be an embargo. Maybe Trump’s just increasing the number, until it reaches the White House phone number and Xi will finally get the hint and call him to make a deal.
