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An Unwinding of Upside Protection Last week, the European Union approved its 18th package of sanctions against Russia over the war in Ukraine. The newest measures included an import ban on refined products processed from Russian crude oil in third
The Sep’25 Brent futures contract initially climbed to $70.75/bbl around 13:20 BST, where it met resistance. Despite fighting to remain above the critical $70/bbl handle at first, prices ultimately sold off and stand at $69.30/bbl at 17:30 BST (time of writing).
In this publication, we leverage Onyx’s proprietary Commitment of Traders data in order to identify changes in swap Open Interest and Positioning against Onyx with a view, in conjunction with long/short entry price levels and volatility analysis to identify potential continuation or reversal trends. In this edition, we take a look at the Aug’25 Sing 0.5% Crack.
In this publication, we leverage Onyx’s proprietary Commitment of Traders data in order to identify changes in swap Open Interest and Positioning against Onyx with a view, in conjunction with long/short entry price levels and volatility analysis to identify potential continuation or reversal trends. In this edition, we take a look at the Aug’25 Brent/Dubai contract.
It is hard to keep Brent away from the $60s, with price action slipping from $71.55/bbl at the start of the week to $68.90/bbl at the time of writing on 17 Jul. Nevertheless, NWE and Asian refinery margins remain supported, bolstered by robust gasoil cracks, despite larger-than-expected EIA-reported gasoline and distillate fuel oil builds. Onyx’s CFTC predicting model anticipates producers/merchants to add to their ICE LS gasoil and RBOB shorts in the week ending 15 Jul, which, if true, should signal rising refiner hedging at these levels. On the macro side, nobody seems to be reacting too much to trade tensions, although the EU has prepared a list of potential retaliatory tariffs in case trade talks with Washington break down. Meanwhile, Washington has also threatened sanctions on buyers of Russian exports should the Kremlin fail to secure a ceasefire deal with Ukraine – a decision that does not seem to faze India’s energy minister Hardeep Singh Puri, who remains confident India can meet its oil needs from alternative sources. Also in Washington, President Donald Trump has been desperately trying to steer his loyalists’ attention away from Jeffrey Epstein and onto more important matters, such as coercing Coca-Cola to switch from high fructose corn syrup to cane sugar. President Trump also reportedly showed off a draft of a letter firing Federal Reserve Chair Jerome Powell on 15 Jul, although he has since flipped to saying that he is “not planning” to fire Powell. While the DXY seems to have recovered from an intraday low of 97.714, Mr. Powell’s confidence likely has not.
The Sep’25 Brent futures contract has seen a choppy afternoon, albeit still rangebound around $68/bbl. Prices finally broke above $69/bbl around 16:30 BST and stand at $69.36/bbl at 17:35 BST (time of writing), where they appear to be meeting resistance.
The Sep’25 Brent crude futures briefly fell below $68/bbl but was supported above that level on Wednesday afternoon, trading at $68.22/bbl at 17:30 BST (time of writing). EIA stats indicated a 3.9mb draw in crude inventories in the week ending 11 July, against API indications of 800kb build. Commercial stocks are still 8% below the 5-year average for this time of the year. India’s oil imports from Russia rose marginally in 1H25, at 1.75mb/d, with Reliance and Nayara Energy making almost half the purchases. Egypt’s diesel and gasoil imports reached a record 370kb/d in the first half of July, 65% higher y/y. Rising imports have diverted barrels away from northwest Europe to the Med, likely exacerbating the tightness in ICE gasoil. Drone attacks on Iraq’s Kurdistan region have reduced crude production by approximately 140 to 150kb/d, according to two energy officials. Finally, the front (Sep/Oct) and 6-month (Sep/Mar) Brent futures spreads are at $0.89/bbl and $2.36/bbl respectively.
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch. Click on the relevant button below to access your COT report.
While the Bal-Jul’25 Brent/Dubai briefly ticked up from -$1.20/bbl on 1 Jul to -$0.65/bbl on 3 Jul, the contract sold off to a low of -$1.46/bbl on 15 Jul. Similarly, the Aug’25 Brent/Dubai weakened from -$0.09/bbl on 3 Jul to -$0.45/bbl on 10 Jul
The Sep’25 Brent futures contract fell to $68.78/bbl at 15:11 BST, before rallying up ot $69.31 at 16:31 BST. Prices have since fallen back to $68.80/bbl at 17:25 BST (time of writing). In the news, Iraq has signed a preliminary deal with US company HKN Energy to develop the Himreen oilfield in northern Iraq, with plans to increase production to 60kb/d from the current 20kb/d to 25kb/d. This announcement coincides with HKN Energy reporting an explosion that halted production at the Sarsang oilfield in the Kurdistan region. In other news, the European Commission has promised to address Slovakia’s concerns about the EU’s plan to phase out Russian gas imports by 1 January 2028, in order to secure agreement on a new sanctions package against Russia. Slovakia has been blocking the sanctions package, warning that quitting Russian gas could trigger shortages, higher prices and transit fees, and legal claims from Gazprom. The EU aims to finalise the sanctions package at a foreign ministers’ meeting, where unanimous approval is needed. The separate proposal to ban Russian gas however, only needs a reinforced majority, meaning Slovakia cannot single-handedly veto it. Nigeria aims to secure a higher OPEC+ production target of 2 mb/d for 2027, up from its current quota of 1.5 mb/d. Despite historically producing below quota due to challenges like oil theft and pipeline vandalism, Nigeria has recently increased output to about 1.4 mb/d. The government is pushing oil companies to boost production, and talks are underway within OPEC+ to set 2027 quotas. Finally, the front-month Sep/Oct spread is at $0.91/bbl and the 6-month Sep/Mar’26 spread is at $2.39/bbl.
The Dated Brent physical differential saw a choppy week, falling to $0.38/bbl on 10 July before rising to $0.71/bbl by 14 July. Phillips 66 and Chevron were offering Midland, while Mercuria joined Total on the buy side. Petroineos returned after a brief hiatus, lifting P66’s offer for a 4-8 Aug Midland cargo at +$1.80/bbl. There is an intent from the market to keep the physical supported, given that the strength in refinery margins keeps a floor on demand. However, the upside is limited given the influx of Midland cargos and offers.
Sep’25 Brent futures were under pressure this afternoon from $71.35/bbl at 13:30 BST to $69.55/bbl at 17:25 BST (time of writing). Although Trump warned of possible 100% secondary tariffs on Russia if a ceasefire isn’t achieved within 50 days, the lack of immediate action put pressure on prices. The Euro recovered to around 1.1689 against the US Dollar USD after hitting a two-week low of 1.1654 earlier. The pair had slipped after Trump threatened 30% tariffs on European imports from 1 Aug, but a softer USD and hopes of talks helped it rebound. Meanwhile, the US Dollar Index held flat below 98.00 ahead of key CPI data and trade updates. Indonesia’s plan to buy up to $15 billion in US energy products hinges on tariff talks, Energy Minister Bahlil Lahadalia said today. He warned the deal won’t proceed if Washington moves ahead with a planned 32% tariff on Indonesia starting in August. Jakarta earlier proposed the purchase to help narrow its trade surplus and secure lower US tariffs. Finally, the front-month Sep/Oct and 6-month Sep/Mar’26 spreads are at $1.07/bbl and $2.90/bbl, respectively.
The Sep’25 Brent crude futures climbed higher last week, closing above $70/bbl and opening higher on Monday morning, reaching $71/bbl. Prices are at their highest level since the late June sell-off. We expect prices to remain elevated this week, with
– In the week ending 11 July, refinery margins declined slightly across all tenors, except for Q1’26 for Asian refineries, which increased by 0.13.
– On a month-on-month basis, all margins have increased, with M1 in Europe and the US showing the largest rises of 2.33 and 2.96, respectively.
– Despite M2 and M3 being slightly higher than M1 on the Asian refinery forward curve, the rest of the curve remains in contango. The higher M2/M3 margins are driven by stronger M2 levels across the cracks, with MOPJ, kerosene, gasoil, and 380 Dubai cracks priced higher over the past month. The M2 92 Dubai crack was priced higher on 11 July.
– The European refinery forward curve similarly showed a higher-priced M2, with prices further along the curve also elevated, as M9 through M12 traded above M8. Both M2 and Q4’25 saw higher prices across naphtha cracks.
– The US refinery forward curve is in contango from M1 through M7, but prices jump at M8 and remain higher than M7 through to M12.
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