The Officials

The big wigs will meet in Riyadh this weekend (or over combed hair as the case may be) . Despite its protestations, Ukraine will not have a seat at the table. If you’re not at the table, it’s because you’re on the menu! Just look at Medvedev’s tweets… They’re sharpening the kitchen utensils before carving up Ukraine like a Christmas turkey, even if Trump had “a very good call” with Zelenskyy today. Turkey’s kicking off too, check the protests, as Erdogan blocked the presidential candidacy of Istanbul’s mayor and chucked him in a jail cell. Messy!

They’re straining and fighting! The shorts and longs battle over the $70 line, biceps bulging. Brent’s battling!
Who will win in the latest long/short battle over in Dubai? The Chinese or Vitol? Want to take sides or just watch… We’re breaking out the popcorn and fizzy drinks to enjoy the screening of this blockbuster! By our counting, there have been 16 convergences in Dubai so far in March. Remember in February there were only 3 in total! And 15 of these have gone to Vitol – more than one per trading day this month so far. Gunvor picked up the other cargo.

As of the week ending 14March, our momentum table shows most of the key futures contracts seeing declines in exchange traded volumes across tenors, except for gasoil contracts. The gasoil contract saw the largest gain in the May tenor, while the June and July tenors underwent smaller increases. For the May tenor, Brent saw the greatest decrease, while RBOB and WTI saw the biggest drops in the June and July tenors.

Brent felt spicy and made it all the way to above $72 this morning. But then slumped in the afternoon, while Trump and Putin were having a chat, and close at $70.78/bbl. Those two were having such a good time yapping they ran overtime and agreed to keep in touch. A match made in heaven? Eventually, it came out they had agreed to a ‘limited’ ceasefire, including a halt on strikes against energy and infrastructure for 30 days. All good for Putin, then: his refineries don’t get bombed and Ukraine gets no guns. And no foreign intelligence to Kyiv either! Russian state news agency Tass reported that they will also discuss an initiative to ensure safety of shipping in the Black Sea.

Man down! Kazakhstan fired its oil minister! After months of ignoring quotas, finally a head rolls. But back in the market, flat price remains firm with Brent holding up near $72.00/bbl as the tension remains at a peak level in the Middle East. But we think Trump has no desire to widen the conflagration despite bombing Yemen, the weakest enemy the US forces could find. The Israelis are doing the same in Gaza. The nominal ceasefire between Israel and Hamas was always fragile, but the repeated blame game between the two, each accusing the other of violating it, was only going to end one way. Now that Israel’s struck at Hamas, of course Netanyahu was quick to blame Hamas for violating the ceasefire. Israel has now ordered evacuation of certain areas of Gaza… we feel like we’ve been here before.

For a change of pace, Mr Trump kept his cool and his mouth shut for most of today. Until he said the US will consider any Houthi attacks as Iranian attacks and thus Iran will suffer “dire consequences”. Flat price shorts suffered the immediate effects, as Brent jumped back up 30c, undoing some of the afternoon’s decline. The White House press secretary also reiterated that reciprocal tariffs will kick in from 2 April.

Brent strengthened away from the perilous $69 handle and it is now safely at the $71.00/bbl level. Even Goldman Sachs with their Delphic powers forecasted a price in line with what one can see on any screen. That’s really smart, we say, as the institution known for some wildly off the mark forecasts has chosen a self-evident route – Brent will bob around between $65 and $80 this year, as GS says “…we reduce by $5 our December 2025 forecast for Brent to $71/bbl.” Oy vey! Sometimes may be easier to say, “we don’t know”.

Dated Brent surged post-IE week from around flat while everyone was busy nattering and sipping on cocktails to above 80c on 4 March, with thanks to the ever formidable Totsa and Trafi duo. And then the diff steadied or stuck at the same levels, one could say, through last week. But this week it has declined steadily from a peak of 88c on Monday to 80c today!

Gold! It’s going for top spot! $3000! Gold has been on a run, and we told you several times it would hit $3,000 per troy ounce and finally broke through this level for the first time in history. Safe haven flows have been gushing since the Trump tariff fiasco kicked off. Complement this with continued buying from central banks and governments around the world – including China – and you get one potent cocktail. A pretty bullish thesis. As debt piles up while governments around the world borrow more beyond their means, it is unsurprising people are looking for a store of value which protects them against potentially erratic currencies! Just wait for the fuse to burn down on the Molotov cocktail of sovereign debt! It’s a ticking time bomb.

Brent fell back but more slowly than the Ukrainians did from Sudhza. At least until the line collapsed and Brent dumped to a $69 handle again as Putin said a truce should lead to a long-term peace. Woohoo! But only under certain conditions. So in terms of actual movement, we remain staunchly at square one! Not going anywhere, just as French wine will under the new 200% Trump tariffs. Neither side is yet to acquiesce to the other’s conditions or soften their position… “We agree with the proposals for the ceasefire”, said Putin. But only on his own terms, having resolved certain “nuances”. A non-headline if ever we’ve seen one!

April allocations are here and they are down bad. Total allocations fell to 36.5 mil bbl – the lowest since December’s allocations! Unipec was among those having to tighten its belt, with its allocation halved from March to just 3 mil bbl. Remember they were getting 14.5 mil bbl in October! A cut even Elon Musk would be impressed by – but maybe he’s not been as successful as he would have liked… Read more on page 2! Meanwhile, PetroChina and CNOOC were the only recipients granted a larger allocation, up by 1 mil bbl and 2 mil bbl, respectively. Hengli’s allocation was slashed from 5 mil bbl to just 2 mil bbl.

Just as Trump says he is “very happy” that oil prices are down, they climb back up again. Back up to $71 even! Talk about comic timing. Reports Putin is likely to accept a ceasefire at some point, but on his own terms, tells us one thing: he’s not happy with the proposals coming from the other side. Numerous Russian officials have been reiterating the need to eradicate the “root causes” of the conflict. Ukraine’s hand looks weaker by the day, as the Kursk incursion collapses and Russia has even taken Sudzha, a key town in Kursk previously held by Ukraine. It’s all falling apart for Zelenskyy!

Every time that Brent sneaks above $70, the peak is getting lower. On 7 March, it made it all the way up towards $71.40, then on 10 March to $70.85, and yesterday to $70.40. This morning it hardly reached $70.20. As the peaks get gradually lower, it looks like $70 is on its way to becoming a ceiling.

As of the week ending 7 March, our momentum table shows all our key futures contracts seeing significant increases in exchange traded volumes across tenors, as we rolled into a new month. In the May contract, WTI saw the greatest increase, as exchange traded volumes doubled w/w. Further down the curve, exchange traded volumes of July RBOB futures more than tripled w/w.

Ukraine wants a 30-day truce. They agreed with America that they should make peace. Sounds great! But nobody bothered to ask Russia… The two also said they are ready to sign the critical mineral resources deal. We’ve heard that one before. Peace isn’t here yet. And there are plenty of obstacles in the way. The massive Ukrainian drone attack and the US agreement to resume sharing intelligence and aid don’t make us think peace is right around the corner. Now Rubio says it’s up to Russia to accept the truce – which means no deal!