Distillates

After coming off overnight from $72.60/bbl to lows of $71.40/bbl, the Jan’25 Brent futures contract recovered slightly this morning, trading at $71.63/bbl at 07:00 GMT and moving up to $71.80/bbl around 10:45 GMT (time of writing). Crude oil prices were volatile as poor Chinese demand continued to weigh on market sentiment, with prices falling to a low of $71.37/bbl at 08:00 GMT. In the news today, refinery run rates in China fell for the seventh month in a row from 14.3mb/d in September to 14.02mb/d in October, decreasing 4.6% y/y, according to data from the National Bureau of Statistics quoted by Reuters. In other news, the US State Department announced today that the US would impose sanctions on 26 companies, individuals, and vessels associated with Al-Qatirji Co., a Syrian business alleged to be facilitating the sale of Iranian oil to Syria, as per S&P Global Commodity Insights. Finally, ExxonMobil has announced that it has reached 500mb of oil produced from Guyana’s offshore Stabroek Block, just five years after starting production. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.28/bbl and $1.08/bbl, respectively.

The Jan’25 Brent Futures contract was volatile but saw strength this morning, increasing from $71.85/bbl at 07:00 GMT up to $72.55/bbl at 10:50 GMT (time of writing). Prices reached $72.45/bbl at 09:05 GMT but quickly fell to $72.00 at 09:20 GMT before recovering. In the news today, Libyan oil output is under threat amid protests in response to the kidnapping of a senior intelligence officer Mustafa al-Whayshi. According to Africanews, the protesters blame the Tripoli government for this incident and have shut down oil distribution valves which connect the Sharara and El Feel oilfields to a refinery in Zawya, a facility with a processing capacity of 350kb/d. In other news, TotalEnergies has awarded engineering contracts worth at least $3 billion as part of its fast-track development of Suriname’s first offshore project, according to Reuters. This included a contract with French firm TechnipEnergies for $1.1 billion to build a floating production storage and offloading vessel, projected to startup in 2028 with an expected oil output of 220kb/d and total crude oil capacity of 2mb. Finally, a Bloomberg report has shown that India’s trade deficit widened in October significantly to $27.1 billion, compared to a survey forecast of $22 billion. Imports grew 3.9% in October y/y while exports rose by 17.3%. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.33/bbl and $1.22/bbl, respectively.

After trading rangebound overnight, the Jan’25 Brent futures contract saw support this morning, moving from $72.00/bbl at 07:00 GMT up to $72.45 at 10:35 GMT (time of writing). In the news today, Financial Times has revealed that Russia’s energy minister Sergei Tsivilev attempted to combine the country’s oil majors, involving the nationalisation of Lukoil and tightening control over Rosneft and Gazprom. Tsivilev introduced this ambitious idea during his initial meeting with President Vladimir Putin last month, but Putin has yet to greenlight his plan. In other news, Japan Petroleum Exploration (Japex) is looking to invest in the US tight oil and gas sector, with the aim of becoming an operator, according to Japex Executive Officer Yutaka Nishimura. Today, Japex reported a 24% y/y drop in net profit to $136 million for the April to September period, largely due to the yen’s rise against the US dollar, as per Reuters. Meanwhile, Kazakhstan’s biggest oil field Tengiz, operated by US major Chevron, has reduced oil output by around 21% on average since 26 Oct to 496kb/d, industry sources told Reuters. Finally, China has announced tax cuts from the current 3% to 1% for first and second home buyers, as part of their fiscal policy measures to boost the ailing property market. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.25/bbl and $0.92/bbl, respectively.

The Jan’25 Brent futures contract saw support this morning, moving from around $71.70/bbl at 07:00 GMT up to $72.30/bbl at 10:50 GMT (time of writing). In the news today, Israel has failed to meet a series of US aid demands to ease the humanitarian crisis in Gaza. A letter from the US on 13 Oct stipulated that Israel must take steps to improve the aid situation within 30 days and if not could face restrictions on US military aid, as per Reuters. In other news, in an official company statement, Rosneft has denied any plan to merge Russia’s largest oil companies into one entity, claiming “the alleged intentions [have] nothing to do with reality” and do not follow “any reasonable business logic”. Finally, Exxon’s Darren Woods has urged US president Trump not to leave the Paris Agreement on climate change, saying that it would create “a lot of uncertainty” and be counterproductive as administrations change. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.24/bbl and $0.82/bbl, respectively.

The Jan’25 Brent futures contract weakened this morning, trading at $73.95/bbl at 07:00 GMT and selling off from $74.05/bbl at 09:10 GMT to $72.90/bbl at 10:20 GMT, inching down further to $72.80/bbl at 10:45 GMT (time of writing). Crude oil prices sold off as the market continues to react to weakening Chinese oil demand and the declining risk of Hurricane Rafael to US Gulf Coast oil infrastructure. In the news today, Chinese customs data showed that China’s crude imports were at 10.53mb in October, a decrease of 8.7% y/y and down from 11.07mb in September, according to Reuters. In other news, the Syrian state news agency SANA made initial reports of an Israeli attack in Homs’ southern countryside in central Syria, with Israel allegedly targeting an aid gathering centre for displaced Lebanese citizens. Finally, Russia is considering a merger of Rosneft, Gazprom, and Lukoil, as per the Wall Street Journal. This would entail Rosneft absorbing the two smaller companies, resulting in the world’s second-largest oil company after Saudi Aramco and a combined capacity of almost 7.5mb/d. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.24/bbl and $0.84/bbl, respectively.

The Jan’25 Brent futures contract weakened this morning from $75.10/bbl at 07:00 GMT down to $74.50/bbl at 10:25 GMT (time of writing). Crude oil prices weakened amid the unveiling of China’s $1.4 trillion stimulus package. Chinese officials neglected to announce additional measures to boost domestic demand, potentially disappointing markets according to a Financial Times report. In the news today, Petrobras reported a 22% increase in its Q3’24 net profit at $5.7 billion. This was partly due to several operational milestones including the start of oil production at Petrobras’ Mero-3 platform with a capacity of 180kb/d and at their FPSO Maria Quiteria with a capacity of 100kb/d. In other news, Citigroup claimed a Trump presidency may be net bearish for crude prices on higher domestic production and tariffs. Meanwhile, Standard Chartered said US producers won’t necessarily heed Trump’s call for more drilling. Finally, the UN Human Rights Office stated that women and children account for nearly 70% of fatalities it has verified in the Gaza war thus far, condemning what it called a systematic violation of the fundamental principles of international humanitarian law, as per Reuters. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.32/bbl and $1.27/bbl, respectively.