Due to International Energy week events, the Dated Brent Update report will not be published in the week commencing 24 February 2025.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 talk of the market has been Trump’s tariff announcement on imports from Canada, Mexico, and China. This week, we expect price action in Brent crude futures to remain rangebound between $75 and $79/bbl in the Apr’25 contract as the
The Apr’25 Brent futures contract found support at just shy of $76.00/bbl at around 0300 GMT and strengthened through the morning to $76.55/bbl at 10:35 GMT (time of writing). President Trump issued executive orders on 1 Feb, which will take effect on 4 Feb, including a 25% on most goods from Mexico and Canada, a 10% tariff on energy imports from Canada, and a 10% tariff on Chinese imports. Goldman Sachs sees minimal price impact, keeping its forecast unchanged after raising it last week, with its Brent forecast for 2025 raised to $78/bbl from $76/bbl. Iraq approved a budget amendment to restart Kurdish oil exports via Turkey, doubling payments to the Kurdish region to $16/bbl. PM Al-Sudani urged swift action after a year-long export halt over disputes. Nigeria aims to boost oil and condensate output to 2.7 mb/d by 2027 from 1.67 mb/d in December. This would allow Nigeria to remain within its OPEC+ crude quota as it will likely be a strong addition to condensate production. At the time of writing, the Apr/May’25 and Apr/Oct’25 Brent futures spreads stood at $0.87/bbl and $3.75/bbl, respectively.
The Apr’25 Brent futures contract fell to around $75.25/bbl at 1500 GMT before strengthening to $75.95/bbl at 1700 GMT (time of writing). The PCE price index rose 0.3% monthly and 2.6% annually, keeping inflation above the Federal Reserve’s 2% target, while core PCE increased 0.16% in December and 2.8% year-over-year. The 6-month annualized rate fell to 2.3%, the lowest in 2024. Libya’s NOC, under new acting chairman Massoud Suleman, aims to increase oil production and enhance transparency while considering office closures to streamline operations. Suleman also plans to work with authorities to end crude-for-fuel swaps and secure a stable budget for refined petroleum products. Exxon Mobil exceeded earnings expectations in Q4 despite lower oil prices, driven by strong production growth in Guyana and the Permian Basin. The company is increasing capital spending to over $30 billion annually, aiming to lower breakeven costs and sustain profitability while expanding LNG and crude production projects globally. At the time of writing, the Apr/May’25 and Apr/Oct’25 Brent futures spreads stand at $0.77/bbl and $3.43/bbl, respectively.
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).
Risk off, worry on On Monday, we forecast March Brent futures to end the week between $75-79.00/bbl. At 1600 GMT, March Brent is within this range at $76.75/bbl as it expires today, and April becomes the prompt at $75.75/bbl. This
The Apr’25 Brent futures contract climbed to $76.40/bbl at 03:00 GMT but softened into the day, hitting $75.50/bbl at 10:15 GMT. The contract finally saw support at this level and rose to $75.70/bbl at 10:38 GMT (time of writing)
The Apr’25 Brent futures contract climbed from $75.40/bbl at 1400 GMT to see resistance around $76.50/bbl at 1540 GMT and is supported at just shy of $76.00/bbl at 1738 GMT (time of writing). Petrobras boosted reserves to 11.4 billion barrels in 2023, adding 1.3 billion barrels while producing 900 million. It plans to invest $111 billion from 2025-2029, with $77 billion for oil and gas exploration. Ukraine launched multiple drone strikes on Russian energy facilities, including a key oil refinery supplying Putin’s war effort. Oil flows at Russia’s Ust-Luga port were reportedly halted, supporting Kyiv’s claims of a successful attack on a pumping station. Shell expects an 85% reserve replacement ratio (RRR) for last year, indicating it replaced 85% of the oil and gas it produced. Over three years, its RRR averaged 108%. The company projects 2024 reserves at 9.6 billion barrels of oil equivalent. A judge ruled the Rosebank and Jackdaw oil and gas fields in the North Sea unlawful, siding with Greenpeace and Uplift over missing emissions assessments. At the time of writing, the Apr/May’25 and Apr/Oct’25 Brent futures spreads stand at $0.79/bbl and $3.38/bbl, respectively.
Gong Xi Fa Cai! Happy Year of the Snake to everyone in the oil market while they anxiously watch the front-month Brent futures contract tread around the low $77/bbl handle on the eve of expiry. The soon-to-be-prompt Apr ’25 Brent futures contract closed below $76/bbl on 29 Jan, where it found support and climbed to $76.40/bbl the following day (at the time of writing). Oil supply balances remain in flux as we await Mr Trump’s tariffs. For President Trump, tariffs are a means to achieve his goals, and he has made evident how far he is willing to go to weaponise them, including causing a near-explosion in the price of coffee in America by almost imposing tariffs on Colombia. It’s too soon, with eggs at record highs since Trump took office (Mr. President obviously does not like breakfast). Also in America, the Fed took a break from *“DEI, gender ideology, “green” energy and fake climate change”* and decided to maintain its policy rate at 4.25%-4.5%, citing elevated inflation. In Asia, while liquidity dried up for the New Year celebrations, China’s DeepSeek shook the tech industry worldwide, releasing an innovative and inexpensive AI model in a possible paradigm shift for AI. Finally, returning to the oil market, everyone will be awaiting the weekend, with 1 Feb being the White House’s deadline for imposing tariffs. It will be interesting to see how the market will be in the coming week, with calm waters on one side and the rough terrains of a possible trade war on the other.
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 tide finally turned on US LPG as the weather cleared on the Eastern and Southern coasts. The Mar’25 Mont Belvieu TET propane, C3 LST, weakened from 91.55c/gal on the evening of 17 Jan to 84.375c/gal by the afternoon of 29 Jan. We recommend monitoring the 30-day moving average, at 82.75c/gal for short-term support.
The Apr’25 Brent futures contract climbed to $76.40/bbl at 16:00 GMT, softened to $76.05/bbl at 16:20 GMT before climbing again to $76.40/bbl at 16:40 GMT. The crude futures contract again met resistance at this level and declined to $75.65/bbl at 17:40 GMT (time of writing).
The Apr’25 Brent futures contract climbed to $77.15/bbl at 14:05 GMT but softened subsequently, briefly weakening below $76/bbl at 16:50 GMT.
As the Middle Eastern crude market continues to tighten due to supply tightness fears from the prospect of further sanctions pressure on Russia, the front-month Feb’25 Brent/Dubai swaps contract reached an all-time flow of -$2.50/bbl, while the Feb/Mar box fell to -$1.90/bbl. However, ahead of the Chinese New Year holiday, paper market flows have been less one-directional, with better selling interest observed in Dubai spreads and buying interest in Brent/Dubai. However, trade houses remain substantial sellers of Brent/Dubai boxes.
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.
After coming off below $0.70/bbl on 20 Jan due to offers in the physical, the North Sea Dated Brent physical differential fell below $0.30/bbl on 23 Jan amid offers for WTI Midland and Ekofisk. The physical saw more support after this and climbed to $0.48/bbl on 27 Jan. This support emerged from Shell increasing its offer for WTI Midland in the window on 24 Jan, followed by Mercuria buying three cargoes of WTI Midland on 27 Jan.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in Brent/Dubai and naphtha 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.
March Brent began the week with a strong correction, down around 2% to close at $76.93/bbl on Monday. The move came with a significant weakening of price structure, as the prompt month-time spread shed some 20 cents to $0.80/bbl. Oil
Following the sell-off on Monday afternoon, the Mar’25 Brent crude futures grinded higher overnight on Tuesday, rising from $76.50/bbl to $77.48/bbl by 06:30 GMT (time of writing). In the news, Saudi Arabia’s energy minister met with his Iraqi and Libyan counterparts in Riyadh to discuss stabilising global energy markets, ahead of an OPEC+ meeting on 3 February. Sinopec plans to increase February crude throughput by 100-150kb/d to meet Chinese New Year travel demand and offset reduced runs by independent refiners, while preparing for major refinery maintenance (700kb/d) from mid-March to May. Petrobras’ CEO informed Brazil’s President Lula that the company plans to adjust diesel prices in the coming weeks, though the specific direction of the change remains unclear, according to local media reports. Protesters have forced Libya’s Ras Lanuf and Es Sider oil ports to halt loadings starting Tuesday, threatening significant disruptions to exports amid ongoing political and regional tensions in the country. Two oil tankers carrying Russian crude, Unity and Alfred, made U-turns near the Bay of Biscay due to mechanical issues and adverse weather, anchoring near Cherbourg, France, with no indication of links to recent U.S. sanctions. Finally, the Mar/Apr and Mar/Sep Brent spreads are at $0.91/bbl and $3.97/bbl respectively.
The Mar’25 Brent futures contract experienced a weaker afternoon, trading down from $78.16/bbl at midday to $76.76/bbl, where it trades at the time of writing (17:30 GMT) as concerns surrounding oil supply disruptions from Colombia eased. In headlines, Iraq’s Rumaila oilfield, its largest and one of the most productive in the world with a capacity of 1.5 mb/d has seen its output cut by 300 kb/d following a fire at the field last week. The incident occurred in a decommissioned storage tank at the fifth gas separation station (DS5) in northern Rumaila and was reportedly caused by “unidentified technical reasons,” according to the Iraqi oil ministry. Iraq currently has no timeline for restoring full production. Rumaila, operated in partnership with BP and PetroChina, accounts for roughly a third of Iraq’s total crude output, which has risen by 40% since 2010. In other news, teapot refiners in the Shandong province are under increasing financial pressure as new tariffs on imported feedstock came into effect on January 1, 2025. The import tariff on fuel oil was raised from 1% to 3%, while rebates on consumption taxes were reduced, significantly increasing operating costs. Many of these refiners, which lack sufficient crude import quotas, rely on fuel oil imports to produce transportation fuels like diesel and gasoline. Already struggling with narrow margins amid weak domestic fuel demand, at least four refiners have halted or plan to suspend operations indefinitely for maintenance. The Mar/Apr’25 and Mar/Sep’25 futures spreads have fallen to $0.84/bbl and $3.63/bbl, respectively.
In the week ending 21 January, money managers reduced their shorts in both crude futures benchmarks. In contrast, they added length in Brent for the second consecutive week but reduced length in WTI futures. The oil market was tentative approaching Trump’s inauguration, and the bullish momentum in crude flat price had quickly waned, registering six consecutive days of decline since 16 Jan. Nonetheless, hedge fund positioning in crude futures is the most bullish since April 2024, when Brent flat price last surpassed $90/bbl. With flat price lagging around $80/bbl relative to 2024, buy-side positions are relatively overcrowded at these levels.
