Fuel Oil

The Oct’25 Brent Futures fell from $71.82/bbl at 13:42 BST to $69.63/bbl at 17:15 BST (time of writing). In the news, OPEC+ is expected to approve another oil output increase at their upcoming meeting on Sunday, though the size of the hike for September is still being debated. Sources suggest the group could raise production by up to 548kb/d, matching August’s increase, though a smaller hike is also possible. This would complete the reversal of earlier 2.2 mb/d cuts. OPEC+ has accelerated output hikes since April to counter low global inventories, shifting from years of cuts to regain market share and respond to US demands for more supply. In other news, at least two vessels carrying Russian oil to India have diverted to other destinations following new US sanctions, trade sources and LSEG data show. The sanctions target over 115 Iran-linked entities and ships involved in transporting Russian oil. The diversions highlight growing disruptions to Russian oil shipments as Western sanctions tighten to curb Moscow’s war revenue. India faces rising challenges to its imports amid US President Donald Trump’s threats of 100% tariffs on countries buying Russian crude. Exxon Mobil reported second-quarter profits above Wall Street expectations as higher oil and gas output and low production costs offset weaker crude prices. The company posted adjusted earnings of $7.1 Bn, or $1.64 per share, beating forecasts of $1.56. Production rose to 4.6 mb/d, the highest second-quarter level since in over 25 years. CEO Darren Woods said Exxon remains open to acquisitions but will only pursue deals that add value, citing potential opportunities in the Permian basin. Finally, the front-month Oct/Nov and 6-month Oct/Apr’26 spreads are at $0.96/bbl and $2.76/bbl respectively.

The Oct’25 contract rallied to $72.19/bbl at 15:21 BST and fell to $71.03/bbl at 15:26 BST. Prices have since recovered to $71.83/bbl at 17:41 BST (time of writing). In the news, Indian state refiners have halted purchases of Russian crude over the past week as discounts narrowed and US President Donald Trump warned of 100% tariffs on countries buying Russian oil. India saw its state-run companies shift to spot markets for alternatives such as Abu Dhabi’s Murban and West African grades. While private refiners like Reliance Industries and Nayara Energy continue Russian purchases, state refiners control over 60% of India’s 5.2 mb/d refining capacity. In other news, Egypt has signed an agreement with Eni and BP to begin oil and gas exploration in the Mediterranean Sea, the petroleum ministry announced. The deal also includes plans to drill an exploration well for natural gas in the Lake Timsah area, located in a basin that stretches from the Mediterranean to the Gulf of Suez through the Bitter Lakes region. PBF Energy said its Martinez refinery is partially operational and running at reduced capacity following a 1 February fire, with full repairs expected by the end of 2025. The 156kb/d facility has resumed limited production of gasoline, jet fuel, and intermediates, with throughput projected at 85kb/d -105kb/d during this period. The company reported a smaller-than-expected second-quarter loss of $1.03 per share as refining margins improved to $8.38/bbl, up from $8.12/bbl a year earlier. Finally, the front-month Sep/Oct and the 6-month Sep/Mar spreads are at $0.91/bbl and $2.84/bbl respectively.

Brent futures rallied this afternoon, with Sep’25 at $73.35/bbl at 17.50 BST (the time of writing), from $72.53/bbl at 15.30 BST. Oct’25 reached $72.60/bbl at the same time. The EIA’s inventory report for the week to 25 Jul showed a surprise crude oil stock build of 7.698mb, well above the 1.539mb reported by the API yesterday. US President Donald Trump has announced a 25% tariff on Indian goods and an additional penalty on India’s purchases of Russian oil and military equipment, citing the country’s purchase of Russian oil and military equipment, as the unending war in Ukraine frustrates the White House.. The measures, set to take effect Friday, were unveiled on Trump’s Truth Social account, where he criticised India’s “high tariffs” and trade imbalance with the US. The Indian government said it is reviewing the implications of the move. According to IMF data, the US dollar’s share of global currency reserves slipped slightly to 57.7% in Q1 2025, down from 57.8% at the end of 2024. Meanwhile, the euro’s share rose to 20.1% from 19.8%, its highest level since late 2022, the IMF’s COFER report showed today. Chevron has received a restricted US license to operate in sanctioned Venezuela, sources told Reuters today. The license allows limited activity but bars any oil revenue from reaching President Nicolas Maduro’s government. Finally, the front month-Sep/Oct spread is at $0.79/bbl and the 6-month Sep/Mar’26 spread is at $3.48/bbl.

The Sep ’25 Brent Futures contract rallied all afternoon to $71.14/bbl at 17:05 BST (time of writing). Similarly the Oct’25 Futures contract rallied to $70.40/bbl. In the news, the Indian owners of three vessels chartered to Russia-backed Nayara Energy have requested the company terminate their contracts following recent European Union sanctions on the refiner, according to Reuters sources. Nayara, which operates India’s third-largest refinery at Vadinar in Gujarat with a capacity of 400kb/d, has already reduced operations due to storage constraints caused by the EU measures. In other news, the American Fuel and Petrochemical Manufacturers (AFPM) has criticized the Trump administration’s biofuel policies in a letter to Republican congressional leaders, marking a major rift between refiners and the president. The group argued that the Environmental Protection Agency’s proposal to increase biofuel blending requirements would impose about $70 Bn in compliance costs and harm refiners, consumers, and Trump’s energy agenda. US refining capacity has stagnated at just over 18 mb/d,  with several plants closing. Upcoming closures in California are expected to further cut capacity by nearly 300kb/d. Protests in Angola’s capital, Luanda, over a steep diesel price hike turned violent, with local media reporting several deaths, including a police officer, and numerous arrests after looting and clashes with police. The government recently raised diesel prices by one-third as part of a long-term plan to phase out costly fuel subsidies and stabilize public finances. The increase prompted minibus taxi associations to raise fares by up to 50% and launch a three-day strike. Finally the front-month Sep/Oct and the 6-month Sep/Mar’26 spreads are at $0.77/bbl and $2.69/bbl respectively.

The Sep’25 Brent Futures contract rallied to $70.31/bbl at 14:08 BST before falling to $69.86/bbl at 17:30 BST (time of writing). The Oct’25 Futures contract similarly rallied to $69.50 before softening to $69.14/bbl. In the news, OPEC+ ‘s Joint Ministerial Monitoring Committee meeting ended with no policy recommendation. OPEC+ has been gradually reversing earlier production cuts to regain market share. The group’s most recent increase of 548kb/d in August is likely to be followed by a similar hike in September, after OPEC+ meets on 3 August. This fully unwind a previous 2.2 mb/d cut decided in 2023. In other news, US President Trump has set a new 10-12-day deadline for Russia to make progress toward ending the war in Ukraine, warning of sanctions and possible tariffs if no advances are seen. Trump expressed disappointment with Russian President Putin and shortened an earlier 50-day timeline he had given. The Kremlin has not yet commented, though it previously stated a summit between Putin and Zelenskiy could only occur as a final step toward peace. Austrian energy company OMV reported detecting organic chloride contamination in Azeri BTC crude cargoes destined for its refineries but confirmed the issue was caught before causing any operational disruptions. The discovery follows similar findings by Italy’s Eni and comes after contamination in Azeri crude last week drove price differentials to a four-year low and delayed loadings from Turkey’s BTC Ceyhan terminal. Finally, the front-month Sep/Oct and 6-month Sep/Mar’26 spreads are at $0.71/bbl and $2.36/bbl respectively.

The Sep’25 Brent crude futures saw a bearish Friday afternoon, falling from $69.70/bbl to $68.50/bbl where it found some support. This level was also where prices found support on Thusday evening. Nonetheless, prices have been rangebound between $68 and $70/bbl this week as volatility has sharply declined. In the news, Syria’s energy ministry has announced a tender to sell 500kb of heavy oil crude, where bids must be submitted in person by 5 August. US Gulf Coast refiners have increased their buying of Middle Eastern and South American crudes to offset the loss of Venezuelan and Mexican barrels; however, this might be short-lived if the US allows some sanctioned Venezuelan crude to return to the market. Refiner Phillips 66 reported higher-than-expected Q2 earnings on higher refinery margins and lower turnaround expenses. PetroChina has approved a new refinery and petrochemical complex near Dalian, following recent closure of a nearby old plant. The development comprises a 200kb/d crude oil refinery, a 1.4 million mt per year ethylene complex. Finally, the front (Sep/Oct) and 6-month (Sep/Mar) Brent futures spreads are at $0.80/bbl and $2.26/bbl respectively.

The Sep’25 Brent Futures contract rallied from $68.88/bbl to $69.49/bbl at 17:11 BST. Prices dropped to $68.70/bbl at 17:33 BST (time of writing). In the news, Chevron is regaining permission from the Trump administration to resume oil production in Venezuela, according to WSJ. The agreement comes shortly after a prisoner swap that freed the last 10 Americans held by the Venezuelan government. Chevron confirmed it would continue to operate in line with US laws and sanctions. Earlier this year, the Trump administration revoked Chevron’s license granted under President Biden. Venezuela’s production has stayed at around 900kb/d to 1 mb/d, with much of its crude rerouted through hubs like Malaysia to China despite US threats of tariffs on nations importing Venezuelan oil. In other news, Russia’s FSB has resumed approving foreign tankers to access Black Sea ports, allowing Kazakhstan’s oil exports to restart after a brief halt that disrupted about 2% of global supply and pushed oil prices near $70/bbl. The suspension followed new Russian regulations signed by President Putin after fresh EU sanctions over Ukraine. Kazakhstan’s exports through the Caspian Pipeline Consortium were briefly stopped, though plans for August shipments remain largely unchanged.  Russia is preparing to impose a stricter gasoline export ban that will also apply to fuel producers, aiming to curb rising domestic prices, according to industry sources. The measure would expand current restrictions that only cover resellers. Exemptions will apply to the Eurasian Economic Union and countries with specific fuel agreements, such as Mongolia. Russia has repeatedly used temporary export bans in recent years to prevent shortages and stabilize prices. Finally, the front-month Sep/Oct and 6-month Sep/Mar’26 spreads are at $0.76/bbl and $2.16/bbl respectively.