Fuel Oil

The Sep’25 Brent Futures contract saw a volatile afternoon with prices bouncing between $68.47/bbl and $68.03/bbl. Prices then rallied to $68.53/bbl at 17:28 BST (time of writing). In the news, US crude oil inventories dropped by 3.2 mb to 419 mb in the week ending 18 July according to the EIA. The drawdown was supported by higher demand and exports, with crude exports rising to 3.86 mb/d and net imports falling by 740kb/d. Gasoline stocks fell by 1.7 mb to 231.1 mb, while gasoline demand rose to 8.97 mb/d, though still below typical summer levels. Refinery utilisation climbed to 95.5%, its highest since June 2023. Distillate inventories rose by 2.9 mb to 109.9 mb. In other news, Zinc contamination in the US offshore Mars crude stream has been resolved, with levels now back within expected limits, Chevron announced. The issue, traced to the startup of an offshore well earlier this month, had disrupted supplies to Gulf Coast refineries and prompted the US government to release crude from the Strategic Petroleum Reserve to stabilize operations. Chevron is collaborating with Shell to continue monitoring zinc levels in the pipeline system. Angola has boosted its declining oil output with the startup of two offshore projects adding a combined 60kb/d, according to the national oil agency ANPG. Both projects are part of Angola’s strategy to stabilize production, which has fallen by half since its 2008 peak of 2 mb/d. Finally, the front-month Sep/Oct and 6-month Sep/Mar’26 spreads are at $0.72/bbl and $1.99/bbl respectively.

The Sep’25 Brent Futures contract initially rallied to $69.02 at 13:34 BST before falling to $68.21 at 15:08. Prices have since slightly recovered to $68.33/bbl at 17:35 BST (time of writing). In the news, US Treasury Secretary Scott Bessent will meet with his Chinese counterpart in Stockholm next week to discuss a likely extension of 12 August deadline for a trade deal. Bessent described the current US-China trade relationship as “constructive,” highlighting recent progress including China ending its rare earth export ban and the US resuming key tech exports. Without a deal or extension, tariffs could revert to 145% on US goods and 125% on Chinese goods. In other news, Halliburton reported that declining crude production in Mexico is increasing pressure to revive business, but ongoing payment delays from state-run Pemex continue to hinder operations. Pemex’s crude and condensate output dropped 8.4% in May to 1.64 mb/d. Due to unresolved payment issues many oilfield service companies have scaled back activity. Halliburton expects its international revenue for 2025 to decline by mid-single digits, largely due to reduced activity in Mexico and Saudi Arabia. Russia’s oil and gas revenue is projected to drop by about 37% y/y in July 2025 to 680 Bn roubles, due to lower oil prices and a stronger rouble, according to Reuters estimates. The finance ministry has already cut its full-year revenue forecast from 10.94 trillion to 8.32 trillion roubles, down from 11.13 trillion in 2024. Official figures are expected on 5 August. Finally, the front-month Sep/Oct and 6-month Sep/Mar’26 spreads are at $0.79/bbl and $2.07/bbl respectively.

The Sep’25 Brent futures contract saw lower highs over the afternoon. The contract fell from over $69.20/bbl at 13.45 BST to below $68.45/bbl at 15.09 BST. Although the contract rose above $69.00/bbl around 16.05-16.15 BST, it failed to maintain this and is at $68.95/bbl at 17.20 BST (time of writing). The Lindsey Oil Refinery in North East Lincolnshire will shut after the government failed to find a buyer, following owner Prax’s administration last month, putting 420 jobs at risk. Energy Minister Michael Shanks criticised Prax’s handling, urged them to support workers, and announced guaranteed employment for the coming months plus government-funded training to help workers transition into clean energy jobs, while the Official Receiver seeks buyers for individual assets. Iraq plans to boost crude oil shipments next month, increasing destination-free Basrah Medium exports to around 18mb (20-30% above average). This expansion, part of a broader OPEC+ production surge amid a global supply surplus, includes both destination-free and restricted shipments of Basrah Medium, Basrah Heavy, and Qayara grades. Zambia’s state-owned Industrial Development Corp. signed an MoU with China’s Fujian Xiang Xin Corp. to build a $1.1 billion oil refinery in Ndola, Copperbelt province, with a planned capacity of 60kb/d. The IDC did not disclose the source or transport plans for the crude oil feedstock. Britain imposed new sanctions on two Russian firms: Intershipping Services and oil trader Litasco Middle East DMCC, to pressure Moscow, adding them to its Russia sanctions regime. The update also included 137 additional designations, according to a government notice. US Treasury Secretary Scott Bessent said that the next round of US-China talks may address China’s purchases of sanctioned Russian and Iranian oil, shifting trade negotiations toward national security issues. He warned that buyers of Russian oil could face up to 100% secondary tariffs, urging European allies to follow suit – “I would urge our European allies, who have talked a big game, to follow us if we implement these secondary tariffs”. At the time of writing, the front-month (Sep/Oct’25) and Sep/Mar’26 Brent futures spreads stand at $0.77/bbl and $2.13/bbl, respectively.

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).

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.

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.