View: Cautiously Bullish Target Price: $63-65/bb Front-month Jan’26 Brent futures fell to a 1-month low last week amid easing geopolitical tensions, where the market saw a bearish reaction upon a renewed push towards a peace deal and ceasefire in Ukraine
The Jan’26 Brent futures contract eased this morning, from $62.75/bbl at 07:00 GMT to $62.02/bbl at 10:00 GMT (time of writing). According to Reuters calculations, Russian state oil and gas revenues are expected to decline by roughly 35% m/m in November, citing lower oil prices and a stronger local currency. The Russian Finance Ministry is set to publish official estimates on 03 December. Elsewhere, a BP statement has confirmed that its 400-mile Olympic pipeline in the US remains offline, with over 200 feet of the pipeline excavated over the weekend; however, the cause of the leak has yet to be identified. In other news, Mozambique has granted its state firms a 30-year concession to build and operate natural gas facilities at the Port of Belra and Inhassoro site; the concession will be operated in part by the national oil firm ENH. In geopolitics, Russia has stated that it has not received an updated peace plan following talks between the US and Ukrainian officials over the weekend. In a statement made on Sunday, US Secretary of State Marco Rubio clarified that the peace proposal will continue to be discussed outside of Geneva. Finally, at time of writing, the front-month Jan/Feb’26 and 6-month Jan/Jul’26 spreads are at $0.61/bbl and $1.03/bbl, respectively.
In the week ending 18 Nov, the M1 ICE Brent futures contract saw little to no change, dropping from closing below $65.05/bbl on 11 Nov to a low of $62.35/bbl on 13 Nov and rose to close at $64.92/bbl on 18 Nov, as it continued to be pressured by the 50-day moving average and down trendline. EIA data for the week to 07 Nov showed a larger than expected 6.41mb build in US crude stocks. In its 12 November report, OPEC shifted to a more balanced 2026 outlook, dropping the deficit it had defended throughout the quarter. Brent quickly pulled back to $62/bbl. The IEA also retreated from its earlier “peak oil” stance, acknowledging that demand will likely continue to rise through the decade.
The Jan’26 Brent futures contract eased this afternoon, from $63.05/bbl at 13:15 GMT to $62.31/bbl at 17:00 GMT (time of writing). In the news, discounts for Russian Urals crude at Indian ports have tripled since August compared to Dated Brent, due to US sanctions pushing away major Russian crude buyers. Urals cargoes for December delivery are trading at discounts of $5-6/bbl to Dated Brent as compared to the $1-2/bbl levels seen in August. In a Reuters report, China has imported substantial quantities of crude oil from Indonesia, to which Reuters’ sources have claimed are a method of masking shipments of sanctioned Iranian crude shipping from Malaysia amid scrutiny. Although there have been no official imports of Iranian crude by China since 2022, customs data consistently indicates that Malaysia-sourced oil appears more frequently than Malaysia’s actual production suggests. China’s crude imports from Indonesia rose to 236kb/d in October, per Chinese customs. Indonesian customs report 1.7mt exported from January to September, with only about 25kt going to China. Finally, the front-month Jan/Feb’26 and 6-month Jan/Jul’26 spreads are at $0.62/bbl and $1.17/bbl, respectively.
The Jan’26 Brent futures contract has fallen this morning, from $62.83/bbl at 06:35 GMT to $62.29/bbl at 10:00 GMT (time of writing). In the news, a Bloomberg report has stated that US sanctions on Russian oil majors Lukoil and Rosneft could leave roughly 48mb of Russian crude afloat at sea. According to Kpler data, 50 tankers carrying Urals and ESPO crude, originally destined for China and India, are seeking new destinations; however, Russian crude export flows remain steady at roughly 3.4mb/d over the past 4 weeks. Elsewhere, Tullow Oil has cautioned that its 2025 production may be at the lower end of its forecast (40-45kb/d) due to efforts to meet its capital goals amid increasing debt and overdue payments from the Ghanaian government; according to Reuters, company shares have fallen by as much as 35% to record lows. In other news, BP has reported that its 400-mile Olympic Pipeline remains shut due to a leak earlier this month near Everett, Washington. No timeline of restoration has been given, and the amount of product released and recovered is still being evaluated. On 19 Nov, Washington Governor Bob Ferguson declared an emergency due to the pipeline shutdown, which has interrupted jet fuel supply to the Seattle-Tacoma International Airport. Finally, at time of writing, the front-month Jan/Feb’26 and 6-month Jan/Jul’26 spreads are at $0.59/bbl and $1.07/bbl, respectively.
Europe is frozen! In contrast to the US government, which is back in action and is drip-feeding the market with months-old data. Data scheduled to be released on 07 Oct showed that the US trade deficit decreased 23.8% to $ 59.6 billion in August, as imports fell 6.6% to $ 264.6 billion, while exports dropped just 0.3% to $ 179.0 billion. However, the significant drop in consumer and capital-goods imports, levels last seen in the early COVID era, suggests that consumer and business spending may be weakening. M1 Brent tried and failed to hold strength above the downtrend line from late September, and the 50-day moving average, which has become a seemingly impassible hurdle in the trendless market. Reliable ol’ EIA data, which continued during the shutdown, showed a surprise 3.43mb draw in crude stocks, along with a 700kb draw in Cushing, with refinery utilisation back up to 90%. Hardly surprising, seeing refiners cranking rates with the M1 3-2-1 refinery margin at its highest level since April 2024 (nineteen-month highs), European margins are at twenty-six-month highs, at $13.00/bbl as middle distillates in both regions soar, the M1 gasoil crack in Europe reaching almost $40.00/bbl this week. As the market shifts from being hurricane experts to polar vortex experts, we have seen numerous news reports about the SSW event occurring (or not occurring) in the Arctic right now. A wobble in the polar vortex is likely in December. With forecasts still far out and quite mixed, it may be too early for any certainty, but it might be worth digging out your woolly socks.
The front-month Brent futures contract dropped from $64.35/bbl at 15:50 GMT to $63.90/bbl at 16:20 GMT before easing further to $63.15/bbl at the time of writing (17:08 GMT). Ukrainian President Volodymyr Zelenskyy has reportedly agreed to work on the US’ draft plan to end the Russo-Ukrainian war. Meanwhile, private Indian refiner Reliance has stopped importing Russian crude oil into its refining complex at Jamnagar in Western India, effective 20 Nov – ahead of the US deadline for sanctions on Russian crude oil buyers. In other news, oil from Lukoil’s PJSC share of a field in Iraq continues to flow to global markets, as state marketer SOMO (State Organisation for Marketing of Oil) has taken over sales and is retaining any proceeds in Iraq for the time being, according to Bloomberg. In macro news, US non-farm payrolls climbed to 119,000 in September, from a revised 4,000 in August; however, the unemployment rate increased to a four-year high of 4.4%. Finally, at the time of writing, the front-month (Jan/Feb’26) and six-month (Jan/Jul’26) Brent futures spreads stand at $0.54/bbl and $1.24/bbl, respectively.
In the week ending 18 Nov, the M1 Brent futures contract traded down from $65.03/bbl on 11 Nov to $63.16/bbl on 13 Nov. Prices found support here, rising to $64.92/bbl by the week’s close. Initial pressure in the contract was seen as an OPEC report suggested that global oil supply will closely match demand in 2026, shifting away from its earlier deficit forecast. Meanwhile, the IEA also shifted away from its ‘peak oil’ narrative on 13 Nov, stating that oil demand will likely increase in the next year. However, prices rose as Iran seized an oil tanker shortly after it passed the Strait of Hormuz, signalling growing geopolitical tensions. Dec’25 RBOB futures crack eased this week, from $16.93/bbl on 12 Nov to $16.30/bbl by week’s close. In contrast, Dec’25 ICE gasoil swap crack prices rose from $32.80/bbl on 12 Nov to $38.42/bbl by week’s close.
This week in Brent and ICE gasoil, money managers are expected to cut length and increase shorts; these players are expected to take the opposite stance in RBOB futures. Producers/merchants are anticipated to be risk-on in Brent, adding exposure across the board while taking the opposite stance in ICE gasoil and RBOB.
Further detailed information on other categories and contracts can be found in the report.
The Jan’26 Brent Futures contract rallied all morning from $63.53/bbl at 07:22 GMT to $64.25/bbl at 10:21 GMT (time of writing). In the news, China’s crude oil imports stayed high in October, with record purchases from suppliers like the UAE, Kuwait, Brazil, and Indonesia, though volumes from Russia and Malaysia declined. Official data showed no imports from Iran, Venezuela, or the United States for the fifth straight month. Despite lower refinery throughput from September’s peak, China maintained strong demand while boosting crude stockpiling, as imports exceeded refinery processing by about 690kb/d. In other news, Saudi Aramco has signed 17 preliminary deals worth over $30 Bn with US companies during a visit to Washington by Crown Prince Mohammed bin Salman, focusing on LNG, financial services, and materials manufacturing. These agreements, building on earlier deals potentially worth up to $90 Bn, aim to strengthen collaboration and support Aramco’s growth in the US, including projects like the Lake Charles LNG investment and partnerships with companies like Baker Hughes, Halliburton, Blackstone, and JPMorgan. Recent surge in oil tanker bookings from the Middle East to India indicates higher upcoming import flows, driven by India’s efforts to replace Russian crude due to upcoming US sanctions. So far, about a dozen vessels, including supertankers and Suezmax ships, have been chartered for late November to December. This activity has pushed freight rates to near five-year highs, reflecting increased demand and tighter regional vessel availability, amid efforts by Indian refiners to secure adequate supplies ahead of sanctions on Russia’s Rosneft and Lukoil. Finally, the front-month Jan/Feb’26 spread is at $0.54/bbl and the 6-month Jan/Jul’26 spread is at $1.38/bbl.
he Jan’26 Brent futures contract has risen this afternoon, from $62.91/bbl at 15:00 GMT to $63.59/bbl at 16:15 GMT. Prices have since eased to $63.34/bbl at 17:00 GMT (time of writing). In the news, Deputy Prime Minister Alexander Novak has stated that Russia is set to reach its OPEC+ oil production quota (~9.5mb/d in November) by early 2026, claiming that recent sanctions on Russian oil majors Rosneft and Lukoil have not impacted production. Novak also claimed that Russia has fully compensated for its previous overproduction and that no voluntary output reduction is being considered at this time. Elsewhere, data from the Joint Organisations Data Initiative (JODI) has shown that Saudi Arabia’s crude oil exports have reached a 7-month high in September, reaching 6.5mb/d. JODI data also indicated that world oil demand in September surged by 1.4mb/d, led by higher consumption in the US and Indonesia. In other news, Rosneft has slashed its stake in the Kurdistan Pipeline Company (KPC) to less than 50% to protect it from US sanctions, according to Reuters; an 11% stake was sold to UAE-based DEX Capital. In other news, Reuters sources have reported that TotalEnergies and Chevron are leading the race to purchase a 40% operating stake in Galp’s Mopane discovery in Namibia. Mopane has estimated some 10mb of oil at the discovery, with an auction winner being announced by the end of the year. Finally, at time of writing, the front-month Jan/Feb’26 and 6-month Jan/Jul’26 spreads are at $0.47/bbl and $1.04/bbl, respectively.
The international propane market has strengthened over the past fortnight. The front spreads in FEI and CP climbed out of contango for the first time in months. Dec’25 FEI strengthened to about $510/mt, with the M1/M2 spread flipping into backwardation for the first time since May, while positioning rose despite some profit-taking by trade houses and prop traders. The LST/FEI differential was supported by strong U.S. exports, renewed Chinese buying, and colder Chinese weather, though upcoming temperature normalization may encourage further long liquidation. In Asian Pronap, the Dec’25 FEI/MOPJ spread rallied sharply from –$80/mt to –$55/mt, backed by prompt buying and a notable rise in net length, even as some funds sold into the rally.
The Jan’26 Brent futures contract rose from $64.51/bbl at 01.09 GMT to an early morning high of around $64.84/bbl at 05.53 GMT, before it saw lower highs over the morning and was around $64.42/bbl at 10:15 GMT (time of writing). The API reported a third consecutive weekly US oil inventory build, as they estimate crude stocks to have increased by 4.4 mb for the week of 14 Nov, but Cushing is reported to have seen an 800kb draw. They reported gasoline and distillate stocks increased by 1.5mb and 600kb, respectively. Columbia Shipmanagement said the crew has been released and the vessel can resume normal operations, days after Iran’s Revolutionary Guards confirmed they had seized it off the country’s southern coast. The IRGC stated it intercepted the tanker near the Makran coast under a judicial order to confiscate its cargo, with local media claiming the 30,000 tons of Iranian petrochemicals were being illegally transferred to Singapore. Pakistan approved a new offshore exploration consortium, with TPOC set to take over operatorship of the Eastern Offshore Block-C and hold a 25% stake, while PPL retains 35% alongside Mari Energies and OGDC. The Global Trade Research Initiative urged the US to immediately scrap its 25% tariff on Indian goods tied to “Russian oil,” arguing the measure is unjustified now that India has sharply reduced its Russian crude imports. President Trump acknowledged the reduction and said the tariff would be lowered. Finally, the front-month Jan/Feb’26 and 6-month Jan/Jul’26 spreads are at $0.43/bbl and $1.18/bbl, respectively.
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.
It has been an extremely quiet week in Brent/Dubai, with risk appetite extremely low. The basic structure of the market has changed very little week by week. Volumes have dropped off again since our last report on 11 Nov, and there has been very little speculative positioning. From the small spec positioning we have seen, there have been some banks and small funds buying and selling, but this has not been unidirectional, and it is quite hard to build a narrative from.
The Jan’26 Brent futures contract eased this afternoon, from $64.25/bbl at 14:00 GMT to $64.01/bbl at 16:45 GMT (time of writing). In the news, Reuters has reported that Rosneft’s Ryazan oil refinery (capacity 340kb/d) has halted its crude processing after a Ukrainian drone strike last weekend. According to Reuters sources, the refinery is expected to be offline until the end of the month, and no oil loadings are scheduled until after 01 December. Elsewhere, Reuters has also reported that crude loadings at Russia’s Novorossiysk port are 2-3 days delayed due to damage on a key jetty at the facility from a Ukrainian attack. Damages were reported at berth 1 and 1A, which both handle 140kt Suezmax tankers; the former continues to remain idle. In a Bloomberg report, Chinese imports of Russian and Iranian oil are set to drop this month as sanctions continue to disrupt global flows. Estimates by Rystad Energy, as cited by Bloomberg, suggest that imports from Russia could drop 800kb/d in November, while Chinese imports of Iranian crude could drop by roughly 30% in November compared to previous months. In other news, Ukrainian private energy firm DTEK announced that it delivered its first US LNG shipment via the northern route from Lithuania, as Ukraine seeks to diversify its gas import sources. Once re-gasified, the gas will then head to Eastern European markets, including Ukraine and Poland. Finally, at time of writing, the front-month Jan/Feb’26 and 6-month Jan/Jul’26 spreads are at $0.40/bbl and $0.93/bbl, respectively.
The M1 RBOB crack (SwSw) rallied from $16.10/bbl on 11 Nov to $17.73/bbl on 12 Nov and dropped to $16.30/bbl on 18 Nov at the time of writing
The Jan’26 Brent futures contract rose this morning, from $63.65/bbl at 07:15 GMT to $64.05/bbl at 10:30 GMT (time of writing). In the news, Reuters trade sources have stated that India’s Reliance has purchased 1mb of heavy crude from Kuwait Petroleum Corporation (KPC). This follows KPC’s tender to sell crude oil that its Al-Zour refinery cannot process due to unplanned maintenance following a fire in late October. Loading of 500kb of Kuwait crude is expected on 06-07 December, while the remaining barrels are of Eocene crude for 08-09 December loading. In related news, KPC has also signed a deal for a $4.89bn syndicated loan from the National Bank of Kuwait and Kuwait Finance House to boost its oil output, targeting 4mb/d by 2035. KPC CEO Sheikh Nawaf Saud Al-Sabah stated that the loan will support the company’s efforts to diversify its funding sources. Elsewhere, China’s crude oil storage is estimated to have increased in October, by roughly 690kb/d (+570kb m/m), according to Reuters calculations based on official data. October crude imports (11.39mb/d) and domestic output (4.24mb/d) appear to have outweighed an increase in refinery processing (14.94mb/d, +6.4% m/m), per Reuters. Finally, the front-month Jan/Feb’26 and 6-month Jan/Jul’26 spreads are at $0.42/bbl and $0.89/bbl, respectively.
There continued to be great support in the gasoline complex this week, with the strength especially pertinent, and arguably disconnected, in Europe. Prompt cracks in the US, Asia, and Europe are at seasonal highs. The M1 RBOB swap crack has reached resistance as it failed to reach $18.00/bbl this week, although price and the lagging line are above the Ichimoku cloud, showing an overall bullish regime, with the 100-day moving average providing little resistance. There was an EIA-reported 945kb draw in US gasoline inventories in the week ending 07 Nov. This was less than the estimated draw of 2.5mb forecast. However, US gasoline stock levels still lie at 5-year seasonal lows, 1% below last year’s levels and over 4% lower than the 5-year average level.
The Dec’25 EBOB crack failed to maintain strength above $17.00/bbl this week, easing from $17.20/bbl on 12 Nov to $16.69/bbl on 17 Nov. Open interest increased this week, reaching 18mb on 12 Nov amid selling by trade houses and refiners. These players trimming their length indicates waning confidence in the persistent strength throughout the past month. From a technical perspective, bullish momentum remains strong, with the ADX at 62; however, the daily drops in the MACD indicate waning positive momentum.
The Dec’25 92 crack climbed to $14.75/bbl on 13 Nov before meeting resistance and settling to $14.25/bbl on 17 Nov. Open interest remained relatively flat this week, while net positioning experienced some inconsistencies amid trade houses vacillating between buy- and sell-side flows.
The Dec’25 transatlantic arb fell to a low of 1.50c/gal on 14 Nov, before meeting resistance and rising to 1.10c/gal on 17 Nov. Open interest saw a good increase this week, as trade houses and refiners exhibited strong sell-side flows. From a technical standpoint, prices are testing the support from the upper boundary of the Ichimoku cloud. The M1 stochastic momentum indicator shows the fast line above the slow, following a bullish crossover on 14 Nov.
The Dec’25 NWE gasnaph saw an increase in prices, rising to $142.19/mt on 12 Nov. However, resistance was seen here as levels eased to $136.83/mt on 17 Nov. Open interest rose this week, reaching just 9% below the 5-year maximum. Flows were driven by refiners adding to shorts this week, though trade houses were on the buy-side. Technically, stochastic lines in this contract are in overbought territory, but lines remain flat, signalling a pause in momentum, though not yet reversing.
Another week brings another selection of new trade ideas from Flux Insights. This week, we look at trades in Gasoline and Naphtha….
The naphtha swaps market remains largely lacklustre as market players seek direction in the market. A drone attack on the Russian Black Sea port of Novorossiysk took the second-largest exporting terminal of Russian naphtha offline briefly….
