Brent v Dubai

The North Sea physical differential climbed around $0.70/bbl this week, a significant shift from the negative diffs at the start of November. However, last week’s buy-side bias **has now turned shakier.** We saw a trade house sell-side of Dec weekly rolls and Dec/Jan’26 DFL last week. This flow dissipated as the physical inched higher, with 28 Nov instead seeing a trade house aggressively bidding 1H Dec into 2H Dec rolls.

It appears that the prevailing regime has shifted again this week. We saw a trade house flipping to a sell-side axe in Dec’25 weekly structure on 01 Dec, leading to a sell-off in prices exacerbated by thin liquidity. The Bal-Dec’25 DFL fell from a high of $0.87/bbl on 28 Nov to $0.69/bbl on 01 Dec, where it met support and climbed to $0.75/bbl. The 01-05 Dec three-week roll sold down to $0.70/bbl, with the Bal-Dec/Jan’26 DFL roll standing at $0.22/bbl on 01 Dec. We saw similar sell-side interest on 02 Dec, with selling in the 15-19 Dec CFD and 15-19 Dec vs Cal Jan roll, with only some buying in Bal-week CFD and the 15-19 two-week roll supporting prices.

Returning to the physical differential, although we continue to see the usual suspects buying the physical, prompt offers have been increasingly aggressive, casting a doubt on the robustness of this strength. We see relative support from the 8-12 Dec CFD, indicating that we may see some near-term support; however, it will be vital to monitor how sentiment shifts in the coming week.

There has been a complete reversal in the regime since our report last week, with our bullish outlook seeming modest compared to the market’s upswing. There has been buy-side interest in the physical window from Totsa and Trafigura. Players who bought this time last week are comfortably sitting on around a dollar in profit. In the window, Totsa was seen lifting a Midland offer from Vitol. Looking at the basket, Oseberg needs to be bid higher than 48c for the differentials to increase meaningfully; this may very well happen.

Nevertheless, we have observed good liquidity in the market, which removes the ‘fear factor’ of players being forced out due to a thin market. This caps how high the structure can go in the front, and thus, we are not significantly bullish from current levels. There is little fundamental reason for the recent strength, given that there is plenty of oil available. This robust physical differential, which moves in a reasonably predictable manner, has caused the CFD market to try and anticipate the peak a little earlier. Given this, we expect a soft landing, due to the strong liquidity we have seen during the uptrend and plenty of activity this week.

The North Sea physical differential has remained pressured over the past week. The physical sank to a low of below -$1/bbl amid significant sell-side interest, with Vitol at the helm of this ship.

The past few sessions were a calamity for North Sea crude bulls, as the physical differential collapsed towards -$0.80/bbl, the lowest level since May 2024. Falling by 80c in a session, Vitol, which previously was the main buyer, flipped short, and the herd promptly followed. The bleeding was only stopped when Total lifted from Vitol. The oil glut bears have been vindicated, and this comes during a very high margin environment, where levels are at their highest in the year-to-date, driven by relentlessly bullish gasoline and gasoil cracks. The Q1 DFL has been heavily offered, and there may have been merit to OPEC’s pause in their output hike for that period.

November has arrived, and things feel tentative in the North Sea market. The glut has not materialised yet in the physical market, with physical differentials strengthening from negative to above $0.50/bbl over the past week. Energy executives at the ADIPEC conference in Abu Dhabi are also downplaying the oversupply narrative, instead focusing on the demand story. Following Vitol’s footsteps, Gunvor took on the December Brent futures expiry, picking up 32x Jan EFPs. In the physical window, Vitol and P66 were the main buyers, picking up 2x Midland and 2x Ekofisk, respectively.

The Dated complex has gone on a bit of a rollercoaster. As the market faced an imminent glut with 2026 spreads in heavy contango, the Russia sanctions news came in and shocked the market higher. Brent flat price and spreads roofed, likely driven by short covering flow. ICE COT data indicated that short positions ahead of the announcement were at an all-time high, so the flows likely triggered a lot of main. While this triggered a rally in the DFLs, prompt barrels still struggled to clear, as indicated by the divergence between the Bal 27-31 Oct week and the November rolls. That 1-week fly had widened to a -50c/bbl.

There has been immense pressure in the Dated complex in the last week. The implied physical differential curve is negative until March. This type of weakness has not been seen since COVID. The physical windows have been really quiet. Physical windows have been really quiet; everyone is offering, but there has not been any real interest in buying it from them. Glencore offered Midland on 20 Oct, bringing the diff down to around -20.5c. The big names we have seen act as almost perpetual bulls may be feeling pretty sore.

Dated Brent Report – Steady, Steady

Following the rally at the end of September, the Dated market has consolidated over the fortnight. The physical differential remains above $0.90/bbl, although it has ticked down over the past few days. The market has been relatively quiet, with the only bids from Vitol protecting the physical, looking to price out strongly. Otherwise, there’s been neither a buy-side nor a sell-side axe. Looking from afar, the prompt strength seems isolated compared to the rest of the market, with the pocket of strength being focused in 13-17 Oct, where the 1-week roll has rallied by 20c over the past week.

Dubai Report – All quiet on the Middle Eastern front

This week, the market has been exceptionally quiet. The rally in Brent/Dubai has reached resistance at June’s highs of around +43c/bbl in Nov’25 and has since corrected to flat. On 05 Oct, OPEC+ announced that it will increase oil output by 137kb/d in November, continuing a production rise similar to October. The market was expecting an output hike due to rumours and headlines last week, and the market was drifting in anticipation. After the OPEC news and Saudi OSPs, we gapped lower around 30-40c. Saudi Arabia signalled caution by keeping the official selling prices of its main crude grades to Asia unchanged. The kingdom held November OSPs for Extra Light and Light crude flat from October at the average of Dubai and Oman, with increases of $2.50 and $2.20/bbl, respectively, while trimming Medium and Heavy grades by 30 cents each. This move surprised the market, which had expected price hikes, but Saudi Arabia has shown in propane already that speculation and forecasts are no match for chosen settlements. In the physical, the Dubai premium is at its lowest level in six months.

Dated Brent – Vitol Takes A Toll

After spending nearly an entire month in the negatives, the physical caught a large break last week and rallied to nearly $1/bbl. BP came out bidding across the benchmark grades on 24 Sep, and Vitol joined hand-in-hand the day after. A bullish union between the London major and trade house. Chinese players also captured the open Dated/Dubai arb right before it closed, bidding for Forties. Finally, weekly rolls broke their usual trend of weakening into pricing. This week, however, the physical looks like it has reached an inflection point, with the bullish winds abruptly being taken out. DFLs have plateaued at $1.25/bbl, and a continued rally will prove increasingly difficult at these levels.

Dubai Report – Stuck in an OPEC-kle

This past week saw significant weakness in Dubai spreads, with the Oct/Nov’25 spread declining from $1.75/bbl on 15 Sep to lows of $0.60/bbl this week. However, it has retraced to $0.72/bbl at the time of writing on 30 Sep. Similarly, the Oct/Nov’25 Brent/Dubai box rallied from a low of -$1.40/bbl to highs of -$0.15/bbl on 30 Sep, although it has since eased to -$0.30/bbl. Interestingly, this move up in Brent/Dubai has primarily been concentrated in the front two contracts (Oct’25 and Nov’25), with the Q1’26 swap falling from $0.20/bbl on 22 Sep to -$0.05/bbl at the time of writing.