The Brent futures contract has crossed below the $76/bbl mark, trading at $75.81/bbl at 17:00 GMT (time of writing). Mar WTI also slumped below $71/bbl and traded at $70.69/bbl at the same time. These declines were in line with Saudi Aramco’s OSP cut, illustrating a poor demand in Asia which requires stimulation. This news overpowered the ongoing Red Sea attacks.
The Indian NOC ONGC announced on Monday that it had started oil production from its deep-see project in the Krishna-Godavari basin. The project’s start had been delayed over the past few years and is expected to increase the Indian NOC’s production of Oil and Gas by 11% and 15% respectively, contributing to an added 7% of production in oil and gas for India. The country being the 3rd largest crude consumer will see its reliance on international oil decrease as it is currently importing over 85% of its consumed oil. Shell flagged on Monday significant impairment charges of up to $4.5bn for Q4 compared to 0.36bn in Q3, mainly due to its Singapore refining and chemicals hub which the major is trying to sell. This illustrates how profitability could be affected due to an unforeseen lack of profitability from some of its assets. As a result, Barclays analysts revised down the target operating profit by 11% from previous forecasts.
The front and 6-month Brent futures spreads are at $0.20/bbl and $1.22/bbl respectively.
