Reports

The Feb’25 Brent futures contract fell slightly from $72/bbl at 07:00 GMT down to $71.65/bbl at 10:20 GMT (time of writing). Crude oil markets appear to have largely priced in the OPEC+ decision to delay production hikes, in line with traders’ expectations and ongoing concerns surrounding oil demand. In the news today, Russian Foreign Minister Sergei Lavrov stated in an interview that the use of a hypersonic missile on the Ukrainian city of Dnipro last month was a demonstration to the West that Moscow is ready to use any means to ensure no “strategic defeat” would be inflicted on Russia. In other news, Chevron will reduce capital expenditures in the Permian Basin to between $4.5 billion and $5 billion in 2025, a drop of more than 10% y/y and marking the oil giant’s first budget reduction since 2021, as per Bloomberg. Finally, German industrial production data released 06 Dec for October showed a 1% decline m/m compared to expectations of a 1.2% increase. The Federal Statistical Office of Germany said the decline was mainly centred in energy production and the automotive industry. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.38/bbl and $1.26/bbl, respectively.

The Feb’25 Brent futures contract has seen marginal strength this morning, trading from $72.40/bbl at 07:00 GMT up to $72.65/bbl at 10:25 GMT (time of writing). With the OPEC+ ministerial meeting on production policy taking place today on 05 Dec, traders are anticipating potential news of OPEC+ delaying production hikes further into Q1’25. In the news today, Shell and Equinor are to combine their UK offshore oil and gas assets in a 50-50 joint venture, Financial Times reported. The project, which will be based in Aberdeen, will take over Equinor’s stakes in three North Sea fields and Shell’s stakes in nine, adding to a combined production capacity of around 138kb/d. In other news, Unipetrol stated that Russian crude oil flows to the Czech Republic through the Druzhba pipeline remain halted, with a Unipetrol spokesman claiming he did not know the reason for the stoppage, as per Reuters. Finally, Rosneft has invested $20 billion in India recently, the Indian government quoted Russian President Putin as saying in a statement on Thursday, according to Reuters. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.41/bbl and $1.54/bbl, respectively.

The Feb’25 Brent futures contract rose this morning from around $73.80/bbl at 07:00 GMT to $74.10/bbl at 10:20 GMT (time of writing). Crude oil prices remained supported this morning while traders await tomorrow’s OPEC+ meeting (5 Dec), where ministers are expected to further delay production hikes into Q1’25. In the news today, in light of the Syrian rebels’ attack on Aleppo on 30 Nov, Iranian Foreign Minister Abbas Araghchi stated “If the Syrian government wants us to deploy troops in Syria, we’ll consider their request”, as per Bloomberg. In other news, the Kremlin’s spokesman, Dmitry Peskov, told the Izvestia newspaper that “there are no grounds for negotiations yet” on how to bring the war in Ukraine to an end. Meanwhile, Reuters reported that advisers to US President Trump are floating proposals to cede Ukrainian territory to Russia while ruling out potential NATO membership for Ukraine. Finally, South Korean lawmakers submitted a bill on Wednesday to impeach President Yoon Suk Yeol after he declared martial law and reversed the move hours later, as per Reuters. S&P Global claimed that the political conflict would pose no risk to oil products supplies for Asia-Oceania customers. However, the Korean Confederation of Trade Unions (KCTU) launched an indefinite labour strike on 4 Dec until the South Korean president resigns, which could cause minor delays in the domestic retail fuel supply network. Finally, At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.44/bbl and $1.63/bbl, respectively.

The Feb’25 Brent futures contract was supported this morning, rising from $72.10/bbl at 07:00 GMT to $72.50/bbl at 10:30 GMT (time of writing). Crude oil prices were elevated amid reports that OPEC+ is likely to extend oil production cuts at its 5 Dec meeting until the end of Q1’25, four OPEC+ sources told Reuters. In the news today, the Pentagon has announced a new $725 million arms package for Ukraine which includes anti-personnel mines and air defence missiles. Meanwhile, diplomats expect Ukraine’s invitation for NATO membership is unlikely to be approved at the NATO foreign ministers meeting, taking place 3-4 Dec in Brussels. In other news, Indonesia has launched auctions for six oil and gas exploration blocks, bringing the total number of blocks offered this year to 11, according to the country’s Energy and Mineral Resources Ministry. Dadan Kusdiana, a senior energy ministry official, stated that the six blocks have a combined potential of 48 billion barrels of oil equivalent. Finally, a sophisticated fuel oil smuggling network is believed to generate at least $1 billion per year for Iraq and its proxies since Prime Minister Mohammed Shia al-Sudani took office in 2022, five sources told Reuters. The operation exploits Iraqi government subsidies for fuel oil allocated to asphalt plants, diverting 3.4mb to 5mb of fuel oil each month for export, primarily to Asia. In addition, Iraq has halted operations at its Basra oil refinery on 1 Dec due to overloaded storage tanks, with the facility producing approximately 260kb/d of fuel oil prior to the shutdown, according to Zawya. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.30/bbl and $1.25/bbl, respectively.

Feb’25 Brent crude futures inched up from $72.42/bbl at 07:00 GMT this morning to $72.60/bbl at 10:55 GMT (at time of writing). Crude oil prices saw support while Chinese manufacturing PMI rose to 51.5 in November, up from 50.3 in October, and Israel continued to bomb Lebanon today despite last week’s ceasefire agreement. Meanwhile, on 30 Nov, Libya’s National Oil Corporation (NOC) stated it hit a new production high for crude oil and condensates, pumping 1.39mb/d according to Libya Herald. In the news today, Poland has shut down a section of the Druzhba pipeline after detecting a leak, as per Bloomberg. The pipeline operator PERN claimed the leak did not affect supply to customers, as oil supplies continued through a second branch “whose technical capabilities fully cover the volume needs”, according to Reuters. In other news, a Bloomberg report revealed that a broadening of US sanctions on tankers hauling Iranian crude has slowed the delivery of oil from Iran to China, citing ship-tracking data. However, no estimate was given for the total potential disruption to Iran’s crude oil flows. Finally, India’s gasoline consumption jumped 9% in November y/y, as Indian gasoline sales hit 3.42 million metric tons, according to the Economic Times. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.32/bbl and $1.23/bbl, respectively.