Reports

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.

The Feb’25 Brent futures contract saw weakness this morning, falling from $72.77/bbl at 07:00 GMT down to $72.08/bbl at 10:55 GMT (time of writing). Crude oil prices saw bearish sentiment as markets weighed up the prospect of ample supply heading into 2025 and continuing uncertainties surrounding demand outlook, as per Reuters. In the news today, Israeli forces have killed at least 42 people in the Gaza strip accused of ceasefire violations, as bombing intensifies according to Al Jazeera. In other news, Canada’s Natural Resources Minister Jonathan Wilkinson told Reuters that Ottawa must make sure the Trump administration understands how their plan to impose 25% tariffs on imports would be counterproductive, not only for oil but also as America benefits from Canadian uranium and hydro exports to the US.

After Jan’25 Brent futures initially fell from $72.80/bbl at 07:00 GMT to $72.40/bbl at 08:15 GMT this morning, the Jan’25 contract made a recovery to $73.30/bbl at 10:30 GMT (time of writing). In the news today, Ukraine’s energy minister said the country’s power infrastructure was “under massive enemy attack”, after a nationwide air raid alert was declared due to incoming missiles. In other news, Asia’s crude oil imports are expected to increase to 26.42mb/d in November, up marginally from October’s 26.11mb/d and 26.24 mb/d in September, according to data compiled by LSEG Oil Research. However, from the period January to November 2024, average Asian crude oil imports are estimated to have declined y/y by 370kb/d. Finally, OPEC+ has postponed its online meeting to discuss oil production strategy from 1 Dec to 5 Dec. OPEC’s secretariat stated the delay was because several ministers will attend the meeting of the Gulf Cooperation Council in Kuwait on 1 Dec, as per Bloomberg. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.54/bbl and $1.82/bbl, respectively.