The Officials

Trump wants rent (or get paid back) but Zelenski said no. We think he’s gone imminently. And UK Starmer is ready to send 25,000 troops to the Ukraine Starmer has to take the biscuit, He is offering to send a peacekeeping force to Ukraine, but it is not numerically possible. This costs loads of money and Reeves wants to hold defence spending at 2.3% of GDP for as long as possible. Starmer’s set to visit the White House next week, he’ll need to provide some grovelling form of
appeasement and Reeves might have to dig up $5-6 billion extra needed to raise that to 2.5%! Great use of tax money! Let’s be blunt here, NATO lost again and this means that an accommodation between Russia and the US will be ironed out in ‘Trump’s time’ as one of his envoys said. This means quick time in the Riyadh meeting. Note Switzerland was bypassed.

Europe has been cast off as JD Vance calls Europe’s leaders Kommisars and accused the politicians of ignoring the will of the people, cancelling elections, curtailing freedom of speech and incarcerating people for expressing their beliefs in a peaceful manner. He ruffled some of the grey-suited Europeans’ feathers with his barrage of criticism against Europe’s leadership. We hope the Munich Conference leads to a more lasting peace than the 1938 Agreement. Whatever Starmer says, insisting Ukraine’s momentum towards NATO is “irreversible”, it’s obvious Europe is relegated to the children’s table. They scream and shout for attention, but the grown-ups are busy talking among themselves. Scholz didn’t get a Valentine’s hug from Vance, who ignored him. ☹ Vance also told the Europeans to take care of themselves.

Peace is coming even if the old and feeble European empires are still resisting, in words because they have no swords. American realism is clashing with the old, wounded German, British and French egos, but if you have no money and no swords all that you can do is moan – and moan they will! America has realized that dumping material and money into Ukraine will turn out more financially disastrous that the $3 trillion consumed in Afghanistan.
If there’s any doubt of the outcome look at the markets; they have no emotion, they just react to conditions. TTF shed 18% in three working days and is now trading at €48.58/MWh. The German Dax index is up 3.7% in five days and 8% in a month; the economy likes peace even if Scholz doesn’t. The expiring German Chancellor won’t be seen by Vance in his own country at the Munich conference because, as an American official said; “We don’t need to see him, he won’t be chancellor long.” So true. Rollover Beethoven. 😊 And Macron, all he can do is take a stab with his mighty pen and write whatever in the FT about a response to the American ‘electroshock’. He also has no money and is on borrowed time. The war’s over.

The German stock market likes the developments, with the Dax up over 2% today to a record high! Losing has never felt so good. NATO chief, Rutte, insisted that Ukraine will be involved in any peace talks and, apparently, the Kremlin agreed that its foe should be involved “in one way or another”. European leaders also chirped up a chorus that they will not be ignored or disregarded. A show of force or more likely a lunge for some kind of relevance. Zelenskyy said Ukraine won’t accept any deals made between the US and Russia in its absence, like he has any option. Just make it end!

Don’t blink, folks, you’ll miss it! Things are moving so fast now. Lethargic Europe may be apprehensive about coming peace, but Asian trading took it as a bearish sign! As they should have of course! The entire complex is bearish from oil to aluminium via gas and power! We rejoice for beaten down Europeans even if they can’t see how good losing is sometimes. From the open at almost $75, Brent quickly sold off, dumping 50c. The Asians seemed content with a good day’s work and let Brent hover near $74.50 for the remainder of the session. Europe’s entry naturally led to some choppiness and Brent closed at $74.67/bbl. Look at page 2 for a rundown of key contracts’ dump– gas, fuel oil, gasoline and diesel all got hit!

Trump did it and is ending the Ukraine/Russia war!!!! Our joy! Senseless deaths of young sent to fight by old will stop and Europe can stop its economic bleed. Details are being worked out but Russian molecules, gas, liquids and solids will flow back into Europe. A shot in the arm to moribund Germany! This is bearish for crude; it’ll be shipped normally. For diesel, fuel and lighter products too. Shipping routes will be cut again so instead of going from Russia to India for refining and back to Europe, it’ll flow direct to Europe. Bad for shippers, good for consumers. We feel bullish Europe again. Trump’s soliloquy on Truth Social stated in no uncertain terms the mutual respect with Putin and how well their phone call went. They spoke about all sorts of stuff. Including (among other things): Ukraine, the Middle East, Energy and AI. Putin apparently echoed Trump’s “COMMON SENSE” campaign slogan and Trump said the war must end and that “our respective teams [will] start negotiations.” An end to the needless campaign of destruction is in sight! At last! It’s just debilitatingly sad it’s taken 3 years to get here… US Secretary of Defense, Hegseth, said returning to the 2014 borders is “unrealistic”. This is huge! Everything’s changing fast.

Our sources in China report that one cargo ready to discharge to the account of PetroChina was affected by the prompt enactment of the 10% tariff on crude imports from the US. Including the freight cost, PetroChina would face a tariff bill around $8.00/Bbl. This would force PetroChina to redirect the cargo elsewhere. But separately our sources in Beijing say, not too many cargoes are scheduled to ship in from the US. So, regarding tariffs, one source says, “ready steady, go”. The Dubai window has really settled into a pattern for February: lots of bidders outnumbering the sellers, but nobody stepping up to set the pace, all afraid to pick up the Totsa mantle. On the sellside, only Chevron and Reliance actually got involved today, while the buyside was awash with bidders – the usual suspects, Vitol, Equinor, PetroChina being some of the most active – raising bids, but they seemed largely to concur that sellers were asking for too much.

And when we thought we had seen it all, some compliance folks are now set to lose their jobs while others have permission to loosen the purse strings. Just as the inimitable Trump swishes in and stops the enforcement of the Foreign Corrupt Practices Act to Further American Economic and National Security. In other words ! Here is the link: https://www.whitehouse.gov/presidential-actions/2025/02/pausing-foreign-corrupt-practices-act-enforcement-tofurther-
american-economic-and-national-security/. He adds: “overexpansive and unpredictable FCPA enforcement against American citizens and businesses — by our own Government — for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security.” No need to carry brown bags it’s routine, and it is ok!

The Chinese are back, the economy is firing, the Indians remain short and the products market is not too bad. So the market is set on going higher! Brent flat price liked the feeling of heading upwards it got yesterday and this morning decided it wanted another hit. After ending the Asian session at $76.69/bbl, it just kept going, even challenging $76.80/bbl by 09:30 GMT and the front spread finally got some relief, building back up towards 50c. Remember, keep an eye on the Brent structure’s move against the Dubai structure. The spread between Brent and Dubai is now $2.61/bbl and has narrowed by 17c since yesterday. Please take note that the Dubai flat price is nearing $80.00/bbl, very expensive a consumer would say and kudos to the producers. And for those lifting term barrels are paying $1.50/bbl premium on top of the nearly $80.00/bbl.

The Officials Team is launching a Liquidity Report covering major futures markets and also key swap instruments. The Report contains average daily traded volumes for five working days periods and compares them with the previous five working days giving an indicator of liquidity flows into major instruments from week to week. You may consider this, as we do, as a momentum financial indicator into or out of an instrument. In addition, we also provide comparison with the previous year which gives an indication of a discrepancy year on year. These are indicators that are used to market practitioners.

The market is turning. And crude is up and breaking through the downward channel. Why? Gasoil/heating oil have been supporting crude, but gasoline tanked in the West today. And fuel oil is the darling. Brent found support at $74.10/bbl Thursday and is now perking up. Just yet, not convincingly, if gasoline is in trouble.
Throughout the London morning, Brent climbed towards $75.50/bbl, where it settled in for the rest of the day until rising through the window. Despite this flat price recovery, the front month spread remained stubbornly in the low 40c region, apart from some very brief lunges to 46c. By the close, it had declined again, to 43c. Even as the Dubai structure is doing its utmost to hold onto its recent strength (the physical premium was still $3.34 as of this morning), Brent’s structure has suffered since early Feb.

Later today, The Officials will publish a liquidity report on exchange traded volumes, so keep an eye on Onyx Hub, X and LinkedIn to discover our newest report and findings! In the meantime, Unipec’s Saudi allocation fell to 6 mil bbls, from 10.5 mil bbls in the February allocation. But Petrochina seesawed from 2 million bbls in February to 4 mil bbls in March. Overall, the allocations fell 2.5 mil bbls to 41 mil bbls, their lowest since December. Of course, Rongsheng is still the biggest recipient, after all they are a joint venture partner, with a steady 16 mil bbls for the past 3 months. It’s all go among Middle Eastern producers – don’t forget ADNOC OSPs released on Friday. Murban is priced at $80.22/bbl but the big surprise is that Upper Zakum is priced at Murban +$0.10! That’s to say $80.32/bbl, while Umm Lulu is Murban +$0.25 and Das is Murban -$0.40. And don’t forget fuel oil is looking good, providing support to some of the heavies. This is on a relative basis as Dubai is still inflated post Totsa’s squeeze.

Like yesterday, the European morning saw lots of lateral movement as Brent flat price fluctuated mildly in the gentle market wind, like those idling wind turbines in Germany… Today, $75 really was the ceiling, as flat price bounced along in the upper $75 range, edging above $75 for the close of the Asian session this morning but otherwise failing to smash through that glass ceiling. Flat price plunged in the window, dumping to $74.46/bbl at the close. The North Sea window was another Midland fest. Early on, Gunvor and Equinor barged in, trying to get yet more Midland off their hands. Equinor was really keen to shift Midland, offering a 25 Feb-1 March cargo down to Dated +$0.70. Gunvor apparently liked the look of that enough to flip from the sellside and grab it. But Gunvor kept its own Dated +$1.25 Midland offer on the table. That’s not the first time we’ve seen Gunvor offering yet opportunistically buying. Bargain hunters! Gunvor was firing on all cylinders and shifted its attention to offer an Ekofisk too.

Trump is creating the volatility in the crude oil price and then the market does its thing in the products side. And boy, there is a lot going on. As Dubai rose it pulled up the price of fuel oil; many traders see the bunker fuel as a Dubai linked product and HSFO is performing big time. The prompt Sing380 high sulphur fuel oil crack closed positive for the first time since 2019 and climbed as high as $0.79/bbl this morning! Traders also noted lots of March to Q3 spread buying and also pointed to higher seasonal demand due to structural factors such as greater refinery complexity.

On Tuesday, Glencore grabbed a Midland cargo from Gunvor in the window. Now, it’s trying to get its hands on another – for almost exactly the same dates! Equinor and Gunvor were happy to offer again. But then Glencore packed up and went home as the market closed in and Equinor lowered its offers threateningly close. Fortunately for the Norwegians, PetroIneos swept in and lifted its offer for 23-27 Feb at Dated +$0.80. Midland has really been the hot commodity this week. It’s dominated the North Sea window. We suppose a lack of competitiveness for Chinese buyers will have it bleeding out into the market somewhere…