Due to International Energy week events, the Dated Brent Update report will not be published in the week commencing 24 February 2025.
The next report will be published on 4 March 2025.
The October Brent futures flat price suffered a setback on Tuesday afternoon as its sell-off accelerated following the US open. Price action fell from the $81/bbl level at 12:00 BST to lows of $79.63/bbl by 17:25 BST (time of writing). In line with this, Brent spreads weakened significantly, with Oct/Nov falling from $1.10/bbl to $0.90/bbl over the same time frame.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in Dated Brent, Gasoil and Naphtha. 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 October Brent Futures contract saw a weaker morning, trading from $81.60/bbl down to a daily low of $80.59 before rallying back up to $80.95/bbl, where it trades at the time of writing (11:20 BST). In headlines, Russia launched approximately 200 missiles at Ukraine on Monday, targeting energy installations and causing power and water outages in Kyiv.
We expect Nov’24 Brent futures to end the week trading between $78/bbl and $82.00/bbl in what continues to be a range-bound market, albeit the range is likely to be slightly wider than in recent weeks. Given the excitement around the
The bullish sentiment in crude was short-lived as money managers reverted to getting shorter in the crude futures benchmarks in the week ending 20 August. Sentiment in crude futures has become increasingly bearish on a combination of factors. The geopolitical risk premium has evaporated as markets react to positive progress towards a ceasefire deal between Israel-Hamas, whilst assessing no imminent threat to oil production, transportation, and infrastructure in the region. China’s economic troubles have played a significant role, with both OPEC and the IEA revising down their global oil demand growth projections, citing the impact of a weakened economy on oil consumption.
Last week, Brent futures slipped in the first half of the week and the market priced in an Israel-Hamas ceasefire, which did not materialise. Prices were then supported as the Fed meeting in Jackson Hole some dovish hope into the market. Federal Reserve Chair Jerome Powell emphasised the need to support a strong labour market and acknowledged the unmistakable cooling in labour conditions.
Following a relatively quiet overnight session, the October Brent futures flat price spiked above $80/bbl on Monday morning, jumping by 70c in 20 minutes, trading at $80.50/bbl as of 11:20 BST (time of writing).
The October Brent futures flat price rallied into Friday afternoon, climbing by $1 from $78/bbl to the $79/bbl level by 17:00 BST (time of writing). Markets were buoyed by Fed Chair Jerome Powell’s comments, where he stated that “the time has come for policy to adjust”, which was interpreted as a dovish signal. However, the question remains about the amount of the cut (25bps or 50bps), and the upcoming non-farm payrolls report on 7 September may change the calculus. BP has acquired a stake in a Chinese sustainable jet fuel company (Zhejiang Jiaao Enprotech Stock Co.) for 350 million yuan ($49 million). China’s Rongsheng has purchased an Aframax-sized cargo of Canada’s Kearl Lake Blend crude, which is being transported via the TMX pipeline. The crude grade is set to arrive in China for the first time since 2018. Finally, the front (Oct/Nov) and 6-month (Oct/Apr) Brent futures spreads are at $0.85/bbl and $2.84/bbl respectively.
Very low sulphur fuel oil (VLSFO) saw a very strong two weeks, with strength especially prominent in the past week and beginning to soften on 24 Aug.
The Oct’24 Brent futures contract stood around $77.30/bbl early this morning before firming up to $78.05/bbl as of 10:55 BST. However, the contract met resistance here and softened to $77.85/bbl as of 11:15 BST (time of writing).
22 August 2024: 16:30 BST Vitol made Equinor’s dreams come true in the North Sea, with the Nordics finally selling a Sep 11-13 JohanSverdrup at Dated -95c. They’ve been trying to shift the medium sour for days. One could say
The Oct’24 Brent futures contract traded around a range of $76.20/bbl and $76.50/bbl between 13:00 BST and 14:45 BST before strengthening further into the afternoon, firming up to $77.55/bbl as of 17:10 BST (time of writing).
Alexa, play Down by Jay Sean. What goes up must come down, and our old friend Brent Futures is once again staring down at the abyss. The bullish EIA stats reading was the perfect dead cat bounce for longs to get the hell out of there, as the US job growth revision fuelled bearish sentiment. Brent found support at the $76/bbl handle, but this feels like déjà vu. Time and time again over the last two years, just when traders thought Brent would capitulate, it always managed to find the floor at the low $70s. But as the famous investment disclaimer goes, “Past performance is no guarantee of future results.” Indeed, the holy trinity of bearish sentiments provided a perfect cocktail this week. Concerns about a US slowdown, namely its labour market and China’s economic misfortunes, paint a bleak picture for demand. Combine this with OPEC’s musings of bringing back barrels in Q4, and it’s no wonder the bears are so gung-ho.
22 August 2024: 09:30 BST Vitol doesn’t just set the floor in Dubai; they lift it. The Dubai physical premium (Physical minus M+2) rose 5cto 87c, while the Dubai physical discount relative to October Brent futures continued to narrow from-$1.86/bbl
The October Brent Futures contract has seen strength this morning, trading from a low of $75.84 at 09:00 BST up to $76.26/bbl at the time of writing (11:20 BST). In headlines, Nigeria’s Dangote refinery plans to source more of its feedstock domestically for Q3, reducing U.S. crude intake. Previously, less than 75% of its crude came from domestic sources; In July, Dangote signalled a shift away from U.S. imports, cancelling two tenders for 6 mb of WTI for September, as reported by Bloomberg. Starting in October, the refinery will purchase up to 445 kb/d in local currency and once fully operational, will process 650 kb/d, making it one of the largest refineries globally. In other news, Mohsen Paknejad was appointed as the new oil minister for Iran, emphasizing the need to boost production amid limited fossil fuel reserves. Iran’s oil output increased by 20% in July, reaching 3.27 mb/d, however sanctions and technological challenges continue to hinder development and exports, with 70% of its gas reserves still trapped underground, according to Reuters. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.46/bbl and $2.10/bbl, respectively.
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.
21 August 2024: 16:30 BST In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by
Oct’24 Brent futures flat price has seen pressure this afternoon, from over $77.70/bbl at 14.00 BST to $76.30/bbl at 17.30 BST (time of writing). The EIA US inventory report revealed a 4.649mb draw in crude stocks compared to the 2.2mb forecast and a 560kb draw in stocks at Cushing, OK. Gasoline saw a draw of 1.606mb. This is less than the 1.8mb forecast, although PADD 1B saw a 1.825mb draw. Distillates saw a larger than forecast draw of 3.312mb, a 2.312mb higher draw than forecast. Refinery utilisation has seen a second consecutive week increase more than predicted, as it rose by 0.8%. The US economy created 818,000 fewer jobs than initially reported in the 12 months to March 2024, according to the Labor Department. This 30% downward revision highlights a weaker labour market. The biggest adjustment was in professional and business services, with 358,000 fewer jobs than first estimated. OPEC+ has limited room to increase output without risking lower prices due to rising supply from the US, Brazil, and Guyana, according to BP’s Chief Economist. If OPEC+ restores output in October, global oil markets could shift from a deficit to a surplus, per IEA data. The Oct/Nov and Oct/Apr’25 Brent spreads are at $0.58/bbl and $2.10/bbl, respectively.
21 August 2024: 09:30 BST In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by
The October Brent futures flat price performed better on Wednesday morning, rising from the $77/bbl level to $77.60/bbl at 11:30 BST (time of writing). API inventory data was lacklustre, as US crude stocks indicated a +347kb build against expectations of a 2.7mb draw. The crude build was more significant than the draw in gasoline and distillates, as previous consecutive draws in US crude stocks contributed to the sustained backwardation in crude.
