Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in crude oil and gasoline 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 Mar’25 Brent futures contract initially declined this morning from around $76.30/bbl at 0615 GMT down to almost $75.90/bbl at 0900 GMT, before recovering to $76.60/bbl at 1030 GMT (time of writing). In the news today, South Sudan’s government has directed the Dar Petroleum Operating Co. (DPOC) to begin resuming oil output on 8 January, in a letter seen by Bloomberg. DPOC operates in Block 3 and 7, with a government target for crude production projected to reach 90kb/d in the first six months. In other news, India’s refining capacity is set to expand 20% by 2028 amid growing domestic and overseas demand for oil products, the country’s petroleum minister Hardeep Singh Puri stated. S&P Global Commodity Insights estimates India’s refining capacity could reach 300 million metric tonnes by 2028, with 58% of this increase coming from brownfield expansions. Finally, Nigeria’s Seplat intends to raise its production output from around 50,000 barrels per day to 120,000 barrels per day within six months, after recently acquiring Exxon Mobil’s assets in the West African country, as per Financial Times. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.62/bbl and $2.62/bbl, respectively.
After seeing strength this morning, the Mar’25 Brent futures continued to rise from $76.80/bbl at 1200 GMT up to $77.50/bbl at 1515 GMT, before declining to $76.30/bbl at 1740 GMT (time of writing). In the news today, the Biden administration has banned oil drilling in large coastal areas ahead of President-elect Trump’s inauguration. President Biden is issuing two Presidential Memoranda to protect more than 625 million acres off the East and West coasts, including the eastern Gulf of Mexico and parts of the Bering Sea in Alaska, indefinitely prohibiting these areas from federal offshore oil and gas leasing. In other news, Sudan has lifted a nearly year-long force majeure on pipelines transporting South Sudan’s oil through Sudan to the Red Sea, Reuters reported citing a letter from Sudan’s Energy Ministry. South Sudan’s crude exports reached an annual peak of 186kb/d in January 2024, falling to 58kb/d by December 2024, according to tanker tracking data compiled by Bloomberg. Finally, India’s SPR is looking to expand its inventories, having issued a notice to private firms inviting them to bid for a storage site of 2.5 million metric tonnes at Padur, according to Reuters. India’s underground SPR storage has a total approximate capacity of 5.33 million metric tonnes of crude oil, as per India’s Ministry of Petroleum and Natural Gas. At the time of writing, the Mar/Apr ’25 and Mar/Sep ’25 Brent futures spreads stand at $0.62/bbl and $2.61/bbl, respectively.
In the week ending 24 December, money managers were risk-off in Brent while adding length to their long positions in WTI. With crude oil markets quietening down for the holiday season, we saw proportionately lower positional changes in the latter half of December, alongside ongoing uncertainty surrounding Trump’s incoming administration policies and China’s oil demand outlook heading into 2025. RBOB futures saw a reduction in money manager long positions for the week to 24 December, while gasoil and heating oil futures showed a clear buy-side skew among speculative players.
Mar’25 Brent futures strengthened, rising from $73.40/bbl on 30 Dec to $76.90/bbl on 6 Jan, with higher highs and lows. The RSI entered overbought territory on Jan 3, while Bollinger bands widened due to increased volatility. The MACD indicated bullish momentum, but price gains may reflect opportunistic profit-taking in low liquidity.
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
The Mar’25 Brent futures contract fell from a daily high of $76.90/bbl at 0100 GMT to see resistance at $76.15/bbl, around level with the 21-day simple moving average, for much of the morning. It rose to $76.40/bbl at 1020 GMT (time of writing), with the daily upper Bollinger Band seemingly acting as a resistance level. Saudi Arabia plans to borrow $37 billion in 2025 to fund oil-diversification projects and repay debt, starting with a three-tranche dollar bond managed by Citigroup, Goldman Sachs, and JPMorgan. Saudi Aramco raised its February crude prices for Asia, increasing Arab Light by 60 cents to $1.50 per barrel above the regional benchmark, after hitting a four-year low in January. Asia’s crude oil imports fell 1.4% in 2024, the first annual decline since the pandemic, driven by a 1.9% drop in Chinese imports, Reuters reported. Meanwhile, India is expected to surpass China as the top driver of global oil demand in 2025, with a forecasted 3.2% growth compared to China’s 1.7%, according to S&P Global. Beijing will expand ultra-long treasury note funding in 2025 to boost company growth and consumer spending, aiming to revive the slowing economy. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.60/bbl and $2.61/bbl, respectively.
After seeing weakness this morning, the Mar’25 Brent futures contract recovered this afternoon, increasing from $75.60/bbl at around 1100 GMT up to $76.60/bbl at 1730 GMT (time of writing). In the news today, Venezuela’s oil exports rose 10.5% y/y in 2024 to an average 772kb/d, with exports to the US soaring 64% to 222kb/d last year, according to data compiled by Reuters. A large share of the year’s export gains came from Chevron’s shipments of Venezuelan crude to the US under a license in place since early 2023. In addition, Venezuela’s crude exports to China were down 18% y/y to 351kb/d, while exports to India jumped to 63kb/d this year from just over 10kb/d in 2023. In other news, China’s CNPC is expected to boost crude production capacity at its West Qurna 1 oilfield in Iraq from the current 550kb/d capacity to 800kb/d by 2028 and 1.2mb/d by 2035, the project’s subsurface manager Cai Kaiping stated. Finally, Middle Eastern crude oil grades strengthened in the final week of December on robust demand from Asian refiners and limited flows of Iranian and Russian barrels, as per Bloomberg. In late-December, Oman crude futures and partial lots of Dubai crude were priced at $1 or more over Brent, surging to a rare premium to the North Sea crude. At the time of writing, the Mar/Apr ’25 and Mar/Sep ’25 Brent futures spreads stand at $0.62/bbl and $2.70/bbl, respectively.
The Mar’25 Brent futures contract has steadily declined this morning from around $76.00/bbl at 0600 GMT down to $75.65/bbl at 1050 GMT (time of writing). In the news today, US President-elect Trump has called to “open up” the North Sea and get rid of windmills in a post on his social media platform Truth Social. Trump’s comments came in response to a report about Apache Corporation’s plan to exit the North Sea by year-end 2029, as per Reuters. Oil companies have been exiting the North Sea in recent decades, with production declining from a peak of 4.4mb/d of oil equivalent at the start of the millennium to around 1.3mb/d today, Reuters stated. In other news, the decline in Mexico’s crude and gas production could accelerate, potentially losing 100kb/d of production every year beginning in 2025, according to S&P Global. The report highlighted that production is falling at Pemex’s seven largest fields, with multiple major oil companies relinquishing exploration contracts in recent years, including Shell and Chevron. Finally, heating oil futures have gained 5% w/w while US natural gas prices saw a weekly rise of 4%, according to the Financial Times. The jump in prices comes as the National Weather Service warns of an “Arctic outbreak”, with the potential for sub-zero temperatures as far south as the Gulf Coast and Florida. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.49/bbl and $2.36/bbl, respectively.
The Mar ’25 Brent futures contract continued to see support this afternoon as it rose from around $75.70/bbl at mid-day to $76.40/bbl at 17.15 GMT (time of writing). China’s manufacturing PMI dipped to 50.5 in December, missing forecasts, as output slowed and export orders shrank amid weak demand and tariff risks. While services and construction showed improvement, this weaker data could prompt the government to boost stimulus measures. Iran’s Deputy Foreign Minister, Majid Takht-Ravanchi, is visiting India for talks on resuming energy trade, which has plummeted since US sanctions in 2018 forced Indian refiners to stop buying Iranian oil. Bilateral trade fell from $17 billion in 2018-19 to $2.3 billion in 2022-23. US crude oil stocks decreased by 1.18 mb for the week ending 27 Dec, compared to a 4.24 mb drop the previous week and below the forecasted decline of 2.75 mb, according to the EIA. The latest Dallas Fed Energy Survey showed Dallas’ energy sector grew in Q4, with activity rising to 6.0 from -5.9 in Q3 and outlook improving to 7.1. Oil production was steady, while gas production edged lower. At the time of writing, the Mar/Apr ’25 and Mar/Sep ’25 Brent futures spreads stand at $0.49/bbl and $2.40/bbl, respectively.
The Mar’25 Brent futures contract was supported this morning, rising from around $74.80/bbl at 0630 GMT up to $75.60/bbl at 1050 GMT (time of writing). Market sentiment saw an optimistic start to the new year, potentially bolstered by expectations that China may introduce additional measures in 2025 to stimulate economic growth. In the news today, the International Longshoremen’s Association (ILA), a union representing cargo handlers at every major Eastern US and Gulf Coast port, is threatening to strike on 15 January, according to Bloomberg. Following a three-day strike in early October, the ILA agreed to delay further action until mid-January, now pushing for stronger protections against labour automation at ports. In other news, after the suspension of the Ukrainian natural gas transit deal, Moldova’s breakaway region of Transdniestria has cut off supply of heating and hot water to households, with Russia previously pumping about 2 billion cubic metres of gas per year to Transdniestria, as per Reuters. European front-month gas prices rose 4.3% on the first trading day of the year, the highest since October 2023, Bloomberg revealed. Finally, India’s gasoline and diesel demand saw respective increases of 9.8% and 4.9% in December y/y, according to the Economic Times. The report attributed the increase in demand to holiday travel, citing petrol sales of three state-owned fuel retailers. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.48/bbl and $2.23/bbl, respectively.
The Mar’25 Brent futures contract was initially supported around the $74.50/bbl level this morning at 0800 GMT, before falling to $73.90/bbl at 1310 GMT (time of writing). In the news today, a Ukrainian drone attack in western Russia caused a fuel spill and fire at an oil depot according to Vasily Anokhin, the governor of Russia’s Smolensk region. Meanwhile, Gazprom said that it would pump a reduced volume of gas to Europe via Ukraine today, as per Reuters. This comes as the Ukrainian gas transit deal is expected to expire on 1 January, following Russian President Vladimir Putin’s 26 Dec statement that there was insufficient time this year to negotiate a new agreement. In other news, Iran has appointed Ali-Mohammad Mousavi as its representative to OPEC, replacing Afshin Javan. Mousavi currently serves as Deputy Minister for International Affairs and Commerce at the Iranian Oil Ministry. Finally, President Xi Jinping said in a speech today that China’s 2024 GDP growth is projected to expand around 5%, reported by Xinhua. According to Bloomberg, economists forecast an expansion of 4.8% for China’s GDP this year. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.41/bbl and $1.94/bbl, respectively.
The Mar’25 Brent futures contract continued to strengthen in the early hours of this morning, reaching a peak of over $74.70/bbl at 0600 GMT before softening to around $74.48/bbl at 0800 GMT (time of writing) as it failed to sustain momentum to break out above the upper Bollinger band (daily), although it remains close. China’s factory activity grew more slowly in December despite recent stimulus efforts and rising trade risks. According to official data, the PMI edged down to 50.1 from 50.3 in November, staying above the 50 mark for the third consecutive month, signalling continued manufacturing expansion. Heating degree days, an indicator of energy demand for space heating, are projected to increase to 499 in the US over the next two weeks, up from the 399 forecast on Friday, according to LSEG. The firm’s meteorologists also predict colder temperatures in Europe in January. The US Treasury was hacked by a Chinese state-sponsored actor through a third-party software provider, BeyondTrust Inc., which reported the breach on Dec. 8. Described as a “major cybersecurity incident,” the attack exploited a key securing a cloud service used by Treasury staff. While China denies the claims, US agencies and forensic experts are investigating, accusing the US of spreading unfounded disinformation. The Nigerian Federal Government, working with the Nigerian Navy, aims to boost crude oil production to 3 mb/d by 2025. Output has already risen to 1.8 mb/d from 1.4 mb/d in 2023. Minister of State for Petroleum, Heineken Lokpobiri, said the newly launched second phase of the operation will be key to achieving this goal. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.43/bbl and $2.06/bbl, respectively.
The Mar’25 Brent futures contract rose this afternoon, from under $74.00/bbl at mid-day to $74.45/bbl at 1715 GMT. US SPR crude inventories increased by about 0.3mb last week, reaching 393.6mb. Sour crude rose by 0.3mb to 250.3mb, while sweet crude remained unchanged at 143.3mb. Nigeria’s state-owned National Petroleum Company announced that its second refinery in Warri, located in the southern region, is now operational. The 125 kb/d refinery, under a $898 million rehabilitation since 2021, is now running at 60% capacity, focusing on kerosene, diesel, and naphtha production, according to NNPC CEO Mele Kyari and the presidency. Iran’s non-oil exports surged 18% to $43.14 billion in the first nine months of the Iranian calendar year, driven by a 33% rise in petrochemical exports, totalling $19.7 billion. Export volumes grew 13.77%, while imports reached $50.89 billion, with higher per-ton values despite a drop in weight. China remained the top export market, followed by Iraq, the UAE, and Turkey. The Chicago PMI dropped to 36.9, signalling a deeper-than-expected contraction in the region’s manufacturing sector and potential bearish pressure on the US dollar. This was well below the forecast of 42.7, indicating a sharper slowdown than anticipated. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.45/bbl and $2.07/bbl, respectively.
The Mar’25 Brent futures contract continued to strengthen daily but has been slipping hourly; after gapping higher this morning, it has softened to oscillate around the simple 20-day moving average for the last few hours. Mar’25 fell from a high of $73.90/bbl at 0100 GMT to $73.55/bbl at 1025 GMT. According to several trade sources on Monday, Reuters reported that China has issued at least 152.49 million metric tons of crude oil import quotas to independent refiners in a second batch for 2025. In Nigeria, troops dismantled 66 illegal refining sites and disrupted a network of oil theft operations, according to Major General Edward Buba. Recovered assets included 657,470 litres of stolen crude oil, 127,870 litres of automotive gasoil, and 5,000 litres of dual-purpose kerosene. The UAE’s economy grew 3.6% in the first half of the year, driven by a 4.4% rise in non-oil GDP to Dh660 billion, 75% of the total Dh879.6 billion GDP. Economic diversification, boosted by entrepreneurship, investment, and tourism, fueled the growth, said Minister of Economy Abdulla bin Touq. Bharat Petroleum Corp, an Indian state-run refiner, is turning to Middle Eastern crude to offset the reduced availability of cheaper Russian oil, according to finance head Vetsa Ramakrishna Gupta. Indian refiners, which typically buy Russian oil on the spot market, are struggling to secure 8-10 million barrels for January loading, sources said. At the time of writing, the Mar/Apr’25 and Mar/Sep’25 Brent futures spreads stand at $0.47/bbl and $2.04/bbl, respectively.
