Naphtha serves as a versatile feedstock for the petrochemical industry, crucial in producing plastics, synthetic fibers, and various chemicals that contribute significantly to manufacturing and industrial processes.
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Brent finally broke above the hallowed $70/bbl level, printing at $72.75/bbl at the time of writing. It appears $73/bbl may be the new $70/bbl, with the contract meeting resistance at this handle throughout this week.
European naphtha flipped sharply from offered to bid this week following reports of Azeri crude contamination with chlorides, which rendered some barrels off-spec. BP and Eni have reported problems with the quality of Azerbaijani oil. In some batches of oil transported by pipeline Baku-Tbilisi-Ceyhan (BTC), organic chlorides were detected. Eni said it has got into the refining system, found during internal tests. This tightened regional supply, pushing the euro cash print from negative into positive territory. The Bal spread rose from -$2/mt to +$3/t, while Aug/Sep surged to $7/mt from just $0.75/mt last week. Several majors moved to the bid side in the physical window, though one trade house remains on the offer side. Meanwhile, sentiment in the East remains weak due to poor cracking margins and soft propane, which has kept the broader tone cautious despite European strength. The Sep’25 NWE naphtha crack has struggled to hold direction this fortnight, slipping to -$6.15/bbl on 22 Jul before recovering slightly to -$6.00/bbl by month-end, still a lower high. Despite the choppy price action, open interest surged over 30% to 23.12mb, well above historical norms. Net positioning fell steadily, down nearly 2mb to -2.75mb, driven by trade house selling. Meanwhile, the Sep/Oct’25 naphtha spread rebounded to $3.25/mt, supported by the flip in euro cash premiums. Positioning initially built strongly, with net longs rising to +5.2mb before easing to +4.8mb. Trade houses and refiners were key buyers. Front spreads like Aug/Sep saw strong momentum earlier in the fortnight, though activity has slowed. Interest in the backend was more mixed, with Sep/Dec bid and Aug/Dec offered.
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch. Click on the relevant button below to access your COT report.
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.
In the week ending 25 July, refinery margins declined slightly across all tenors, with Asian refineries, seeing the largest descrease.
On a month-on-month basis, margins were relatively unchanged, wit the exception of M1 in Europe and US whcih increased by 1.47 and 2.24 respectively.
In the Asian forwards curve, M2 and M3 remain slightly higher than M1 with the rest of the curve still in contango. The higher M2 margins are driven by stronger M2 levels across the cracks, with MOPJ, kerosene, gasoil, and 380 Dubai cracks priced higher over the past month.
The European refinery forward curve similarly showed a higher-priced M2, with prices further along the curve also elevated, as M9 through M12 traded above M8. This is mainly driven by low M1 margins in the Naphtha Crack.
The US refinery forward curve is in contango from M1 through M7, but prices jump at M8 and remain higher than M7 through to M12.
Click below to explore our ETFs report, providing a detailed analysis of price movements, trading volume, and counterparty shifts in ETF underlyings, along with open interest trends in the options market. Featured funds include USO, SCO, UCO, KOLD, BOIL, and UNG. For each ETF, we offer a comprehensive breakdown of price trends, volume, open interest, and key market participants.
In this publication, we leverage Onyx’s proprietary Commitment of Traders data in order to identify changes in swap Open Interest and Positioning against Onyx with a view, in conjunction with long/short entry price levels and volatility analysis to identify potential continuation or reversal trends.
In this edition, we take a look at the Aug’25 Gasoline Arb.
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.
In this publication, we leverage Onyx’s proprietary Commitment of Traders data in order to identify changes in swap Open Interest and Positioning against Onyx with a view, in conjunction with long/short entry price levels and volatility analysis to identify potential continuation or reversal trends. In this edition, we take a look at the Aug’25 MOPJ crack contract.
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.
Last week, we spoke about how it was difficult to hold Brent above $70/bbl, and absolutely nothing has changed. The M1 Brent futures contract moved from a high of $70.80/bbl on 18 Jul to closing sub-$70/bbl on the day and eased to a low of $68/bbl on 23 Jul. Prices met support here but remain at $68.90/bbl. Focus remains on refinery margins and middle distillate cracks. However, while gasoil cracks remain high, the M1 ICE LS gasoil crack has sold off from a high of $27.20/bbl to $24.35/bbl, raising concerns for the bullish trend driving middle distillates for over a month. US distillate fuel oil inventories built by 2.9mb in the week ending 18 Jul, but remain 18% below the 5-year average, which could continue to provide a floor to price action. However, a further sell-off would impact refinery margins, potentially affecting crude demand by refiners. Demand for refined fuel may be lifted by the US reaching trade deals with critical trading partners, such as the EU, providing much-needed respite to the global manufacturing industry. On this note, US business activity has picked up in July, as per S&P Global’s Composite PMI. However, companies asked for higher prices for goods and services, reinforcing the view that inflation would persist for the remaining half of the year and possibly fuelling the ongoing spat between US President Donald Trump and Fed Chair Jerome Powell.
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.
See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as six contracts to watch. Click on the relevant button below to access your COT report.
