Reports

Feb’25 Brent futures fell from $73.70/bbl at 13.30 GMT to $72.70/bbl at 17:00 GMT. A US government shutdown is looming as Congress scrambles to pass a stopgap bill, despite opposition from President-elect Donald Trump, according to Fox News. Economic data showed jobless claims dropped to 220,000 (below estimates) from 242,000 the previous week. US GDP saw annualised growth of 3.1% in Q3, and the Philadelphia Fed survey plunged to -16.4, compared to the predicted +3.0. BP and Iraq have agreed on key technical terms for redeveloping Kirkuk’s oil and gas fields, which still contain billions of barrels of recoverable oil. According to BP, a full contract is expected to be finalized by early next year. Oil operators in North Dakota, the third-largest oil-producing state in the US, are still working to restore facilities after October wildfires impacted key production areas. The fires caused a loss of 520kb and a decline in output to 1.178 mb/d from 1.2 mb/d in September. According to Sinopec, China’s oil consumption is projected to peak by 2027 at 800 million metric tons, equivalent to 16 million barrels per day. They say the decline in diesel and gasoline demand is driving the slowdown in the world’s largest oil importer. At the time of writing, the front (Feb/Mar’25) and 6-month (Feb/Aug’25) Brent Futures spreads are at $0.40/bbl and $1.78/bbl, respectively.

The Feb Brent Futures contract has seen mixed price action this afternoon, trading up to a high of $74.12 at 16:10 GMT before retracing to $73.61/bbl where it sits at the time of writing, as EIA data highlighted that crude inventories fell by 934kb to 421mb in the week, compared with analysts’ expectations in a Reuters poll for a 1.6mb draw. In headlines, Saudi Arabia’s crude oil exports rose to a three-month high in October, reaching 5.92 mb/d, up 174 kb/d from September, according to JODI data. Despite the increase in exports, crude production slightly declined to 8.972 mb/d as the Kingdom adhered to its pledge to produce “around 9 mb/d.” Meanwhile, Barclays downgraded the energy services sector from positive to neutral, citing a bearish oil macro environment, limited investor capital influx, and potential risks to 2025 earnings. The sector, after three years of double-digit growth, is now experiencing a mid-cycle spending plateau. At the time of writing, the front (Feb/Mar’25) and 6 month (Feb/Aug’25) Brent Futures spreads are at $0.38/bbl and $1.64/bbl, respectively.

The Feb’25 Brent futures flat price came off from the $73.20/bbl handle on Tuesday afternoon. Price action fell to lows of $72.50/bbl before recovering to $72.88/bbl by 17:20 GMT (time of writing). In the headlines, the UK imposed new sanctions on two oil trading firms, 2Rivers DMCC and 2Rivers Pte Ltd, and 20 shadow fleet vessels to curb Russian oil revenues and disrupt its illicit oil trade. Oil has washed ashore tens of kilometres of Russia’s Black Sea coast after two aging tankers were damaged in a storm, and now a third tanker has issued a distress signal, heightening fears of a worsening environmental disaster. Saudi Arabia has successfully extracted lithium from oilfield brine and plans to launch a commercial pilot program led by Lihytech, showcasing its move toward alternative wealth sources amid rising global demand for battery minerals. Kazakhstan has downgraded its 2024 oil output forecast to 87.8 million tons, citing maintenance at the Tengiz oilfield, with production totalling 80.5 million tons from January to November. Finally, the front (Feb/Mar) and 6-month (Feb/Aug) Brent futures spreads are at $0.32/bbl and $1.41/bbl respectively.

The Feb’25 Brent futures flat price traded within a 60c range on Monday afternoon. Price action reached highs of $74.30/bbl at 15:30 GMT before falling to $73.74/bbl at 16:30 and climbed to $74.11/bbl by 17:30 (time of writing). In the news, the EU has adopted its 15th sanctions package against Russia, targeting 52 new vessels from Russia’s shadow fleet, increasing the total number of such listings to 79. Shell and its partners will invest $5 billion in Nigeria’s Bonga North offshore oil project, expected to produce 110kb/d by the decade’s end, with 300 million barrels of oil equivalent recoverable from the area. According to a Bloomberg article, tanker rates for Middle East-China routes (TD3C) have fallen by a third this year due to weaker Chinese crude demand, driven by an economic slowdown, fuel-switching, and OPEC+ delays in restarting idled supply, impacting supertanker operators significantly. US SPR crude inventories rose by 0.5mb w/w to 393.0mb last week. Finally, the front (Feb/Mar) and 6-month (Feb/Aug) Brent futures spreads are at $0.38/bbl and $1.69/bbl respectively.

The Feb’25 Brent futures flat price initially saw a decline this afternoon from around $74.10/bbl at 12:00 GMT to $73.60/bbl at 14:05 GMT, before recovering to $74.40/bbl at 17:50 GMT (time of writing). Bullish sentiment has persisted as Russia launched an extensive aerial attack today on Ukraine’s power grid, using 93 missiles and nearly 200 drones, as per Reuters. Ukrainian officials stated six unspecified energy facilities were damaged in the western region of Lviv, in addition to serious damage to thermal power plants, according to DTEK, Ukraine’s largest energy provider. In other news, the presidential decree banning Russian companies from selling oil and petroleum products at the price cap set by the G7 countries has been extended until the end of June 2025, according to Russian news agency Interfax. Finally, US-based Kosmos Energy said it is in early preliminary discussions to buy Tullow Oil, with a view to potentially expanding their African oil assets. Kosmos currently has oil production and exploration assets in basins offshore Ghana and Equatorial Guinea, while Tullow Oil owns offshore production platforms in Ghana, Gabon and Cote d’Ivoire. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.39/bbl and $1.67/bbl, respectively.