Distillates

The Dec’24 Brent futures contract firmed up this morning, strengthening from $77.80/bbl at 07:00 BST to $79.85/bbl at 11:20 BST (time of writing). Price action saw upward movement amid US strikes on Houthi rebels in Yemen over the weekend, alongside a Hamas missile attack on Tel Aviv this morning, on the 7 October anniversary of the Hamas attack. In the news today, after Israel hit Beirut on Sunday with the heaviest night of airstrikes yet, Hamas has fired missiles past Israeli defences into Tel Aviv, triggering air raid sirens according to Reuters. In addition, Hezbollah rockets have targeted a military base south of Haifa, Israel’s third largest city, reportedly wounding eight people. In other news, on Friday, the US military said it carried out 15 strikes on Houthi targets in Yemen. Central Command, which oversees US forces in the Middle East, said the attacks were aimed at limiting Houthi offensive capabilities, as per Reuters. Finally, the explosion of an oil tanker near the international airport of Karachi, Pakistan, has been determined to be a terrorist act according to the regional internal affairs minister. A Chinese Embassy statement has said that a convoy carrying Chinese staff of the local Port Qasim Electric Power Company was engulfed in the blast, believed to have killed two workers from China. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.66/bbl and $2.66/bbl, respectively.

The Dec’24 Brent futures contract found strong support this morning, trading at $77.50/bbl at 07:00 BST and strengthening to around $78.94 at 11:45 BST (time of writing). Price action began moving upward shortly after 08:00 BST amid Israeli airstrikes in Beirut targeting Hezbollah leadership and growing anticipation of a potential attack by Israel on Iranian oil infrastructure. In the news today, Iran’s empty oil tankers previously sitting at an anchorage area near Kharg Island have now left, as per ship tracking data compiled by Bloomberg. In other news, Libya has restarted oil production as the two rival government factions reached an agreement on the governorship of the Central Bank. According to Reuters, Libyan output was 1.2mb/d before the production halt in late August at the Sharara, El Feel, and Essider oilfields. Finally, Spain’s crude oil imports from Venezuela have reached 2 million tons in total this year, just shy of the 2.1 million ton 15-year high. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.65/bbl and $2.43/bbl, respectively.

The Dec’24 Brent futures flat price this morning climbed from $74.75/bbl at 07:00 BST up to $75.34/bbl at 11:20 BST (time of writing), with a low of $74.33/bbl at 10:05 BST and high of $75.40/bbl at 10:40 BST. This upward price action could in part be influenced by widening of conflict in the Middle East. In the news today, the Israeli Air Force has struck a military depot in Syria in the vicinity of Russia’s Khmeimim air base. The operation reportedly was aimed at disrupting shipments of weaponry intended to be delivered to Hezbollah. Meanwhile, the US and other G7 countries have warned Israel against strikes on Iranian nuclear facilities. In other news, maintenance repairs for Kazakhstan’s 400kb/d Kashagan refinery have been postponed and are now due to start 7 Oct and last 30 days, the energy ministry has said to Reuters. Finally, Total has shut an unspecified unit at its 240kb/d Gonfreville refinery for maintenance. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.41/bbl and $1.37/bbl, respectively.

Amid escalating geopolitical tensions in the Middle East, the Dec’24 Brent futures contract saw flat price steadily climbing this morning, trading at $74.80/bbl at 07:00 BST and hitting $75.73/bbl at 11:30 BST (time of writing). In the news today, Israel’s foreign ministry has barred UN Secretary General Antonio Guterres from entering the country due to his alleged failure to “unequivocally condemn” Iran’s attack on Israel, according to Reuters. Whilst anticipation of a retaliatory attack against Iran mounts, Israel has increased military presence in Lebanon, with regular infantry and armoured units joining ground operations. In other news, Saudi Arabia’s oil minister has stated that crude prices could drop to as low as $50/bbl if OPEC+ members do not conform to agreed-upon production limits. Finally, despite pressure from the China, Malaysia has reportedly stepped up oil exploration in the South China Sea, which is estimated to contain 11 billion barrels of untapped oil and 37% of the world’s maritime crude, as per data by Bloomberg. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.45/bbl and $1.49/bbl, respectively.

The Dec’24 Brent futures contract dipped this morning from $71.80/bbl at 07:00 BST to a touch below $70.00/bbl at 10:10 BST, before strengthening and finding support at $71.24/bbl at 11:25 BST (time of writing). This volatile price action comes as Israel launched their ground invasion of southern Lebanon on Monday night. In the news today, Israeli paratroopers and commandos have begun targeting Hezbollah strongholds on the ground. According to Reuters, Israel’s military has stated that the raids will be focused along the border and the incursion does not constitute a war against the Lebanese people. In other news, the US Department of Energy (DOE) has said that 6 mb of crude oil have been bought for the SPR, due to be delivered in quantities of 1.5 mb per month from February through to May 2025. The DOE has bought these barrels at an average price of $68.56/bbl from a combination of Exxon, Shell, and Macquarie. Finally, Germany’s preliminary CPI figures reported inflation has fallen to 1.6% y/y for September, slightly lower than the expected 1.7% and the slowest pace of price growth in over three years. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.27/bbl and $0.71/bbl, respectively.

Dec’24 Brent futures showed weak upside momentum on Monday, following the confirmation over the weekend of the killing of Hezbollah’s leader, Hassan Nasrallah. Initial strength in the morning took the contract to a high of $72.75/bbl shortly before 07:00 BST, where a correction set in and price decreased to $71.54/bbl at 11:10 BST (time of writing). Despite rising tensions in the Middle East, price action has highlighted that bearish sentiment persists. In the news today, Israel has issued a statement claiming to have bombed Houthi targets in Yemen’s port of Hodeidah on Sunday, killing at least 4 and wounding 29. Meanwhile, Israel has kept up their assault on Lebanon following yesterday’s latest airstrike, resulting in at least 105 casualties according to Lebanon’s health ministry. IDF tanks have now gathered on the Lebanon border as fears over a ground invasion mount. In other news, talks between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) over wage issues in US East and Gulf Coast ports are deadlocked, now reaching the 30 Sep deadline for a contract deal. The strike, which is due to begin on 1 Oct, would be the first coastwide ILA strike since 1977. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.25/bbl and $0.58/bbl, respectively.

The Dec’24 Brent futures contract showed choppy price action throughout this morning, trading at $70.87/bbl at 07:00 BST and rising to a high of $71.52/bbl at 09:25 BST, before falling to $71.23/bbl at 11:30 BST (time of writing). This may have been reacting to expectations of increasing output from Libya and an OPEC+ December oil output hike. In the news today, Colombia is set to announce a $40 billion investment plan to shift away from oil to “nature-based climate solutions”, the country’s environment minister, Susana Muhamad, said. In other news, China’s central bank has lowered interest rates today as more fiscal measures are expected to be announced before 1 Oct. In order to ease the property crisis, megacities Shenzhen and Shanghai are planning to lift restrictions on the number of homes that Chinese can buy, according to Reuters. Finally, crude output by Mexican state-owned Pemex fell 6% y/y in August down to 1.77mb/d, with the Olmeca refinery’s output far below targets set by their CEO Octavio Romero. At the time of writing, the front month (Dec/Jan’25) and six-month (Dec/Jun’25) Brent futures spreads are at $0.33/bbl and $0.69/bbl, respectively.