The Officials

The Officials Team is launching a Liquidity Report covering major futures markets and also key swap instruments. The Report contains average daily traded volumes for five working days periods and compares them with the previous five working days giving an indicator of liquidity flows into major instruments from week to week. You may consider this, as we do, as a momentum financial indicator into or out of an instrument. In addition, we also provide comparison with the previous year which gives an indication of a discrepancy year on year. These are indicators that are used to market practitioners.

Who knew? Talking can resolve conflicts. The Russians said talks with the US had gone well and they had covered a wide array of issues. Rubio said the end of the Ukraine war must be acceptable to all – but does he just mean those who are present in Riyadh? As the wordsmiths and silver-tongued diplomats got busy charming and schmoozing, Brent cooled from its peak over $76 to fall back towards $75, soothed by Lavrov’s revelation there should be some moratorium on attacks on energy facilities in the conflict – too late for Kazakhstan . An afternoon recovery saw Brent close at $75.62/bbl.

Rubio and Lavrov sitting across a table from each other, mediated by the Saudis – 30% of global oil production in one room! These are the really big players on the world stage, gathered to carve up the almost expired Ukraine. So sick it is in the infirmary attended by European doctors about to be judged not so good at their job. The US, who has guns, wants its money back and the Russians aren’t prepared to cede any territory they’ve seized. It’s been a 3-year slog, why would they?!
While the world is divided, anyone for $76? After the window closed at $75.18/bbl, Brent went on an adventure, clambering up beyond $76 by 10:45 GMT. Maybe those OPEC rumours are stickier than we thought or not everyone’s as optimistic as us about the prospect for peace in Ukraine – neither Lavrov nor Rubio looked especially happy during their meeting ☹.

The Riyadh meeting represents the three biggest oil producers in the world: US, Saudi Arabia and Russia, with an output of over 31 mil b/d! Around one third of total global oil production. Lavrov, Rubio and MBS are the big wigs drawing out new lines on the map and energy must be at the centre of this new world order. Zelenskyy is also apparently going to visit Saudi Arabia this week – we wonder whether the others will stick around to wait for him or if he’ll be Mr Lonely. He’s busy as he needs a new home. He is also going to visit Turkey tomorrow, according to Erdoğan’s office. Maybe the Turkey Riviera beckons him.

Trump wants rent (or get paid back) but Zelenski said no. We think he’s gone imminently. And UK Starmer is ready to send 25,000 troops to the Ukraine Starmer has to take the biscuit, He is offering to send a peacekeeping force to Ukraine, but it is not numerically possible. This costs loads of money and Reeves wants to hold defence spending at 2.3% of GDP for as long as possible. Starmer’s set to visit the White House next week, he’ll need to provide some grovelling form of
appeasement and Reeves might have to dig up $5-6 billion extra needed to raise that to 2.5%! Great use of tax money! Let’s be blunt here, NATO lost again and this means that an accommodation between Russia and the US will be ironed out in ‘Trump’s time’ as one of his envoys said. This means quick time in the Riyadh meeting. Note Switzerland was bypassed.

Europe has been cast off as JD Vance calls Europe’s leaders Kommisars and accused the politicians of ignoring the will of the people, cancelling elections, curtailing freedom of speech and incarcerating people for expressing their beliefs in a peaceful manner. He ruffled some of the grey-suited Europeans’ feathers with his barrage of criticism against Europe’s leadership. We hope the Munich Conference leads to a more lasting peace than the 1938 Agreement. Whatever Starmer says, insisting Ukraine’s momentum towards NATO is “irreversible”, it’s obvious Europe is relegated to the children’s table. They scream and shout for attention, but the grown-ups are busy talking among themselves. Scholz didn’t get a Valentine’s hug from Vance, who ignored him. ☹ Vance also told the Europeans to take care of themselves.

Peace is coming even if the old and feeble European empires are still resisting, in words because they have no swords. American realism is clashing with the old, wounded German, British and French egos, but if you have no money and no swords all that you can do is moan – and moan they will! America has realized that dumping material and money into Ukraine will turn out more financially disastrous that the $3 trillion consumed in Afghanistan.
If there’s any doubt of the outcome look at the markets; they have no emotion, they just react to conditions. TTF shed 18% in three working days and is now trading at €48.58/MWh. The German Dax index is up 3.7% in five days and 8% in a month; the economy likes peace even if Scholz doesn’t. The expiring German Chancellor won’t be seen by Vance in his own country at the Munich conference because, as an American official said; “We don’t need to see him, he won’t be chancellor long.” So true. Rollover Beethoven. 😊 And Macron, all he can do is take a stab with his mighty pen and write whatever in the FT about a response to the American ‘electroshock’. He also has no money and is on borrowed time. The war’s over.

The German stock market likes the developments, with the Dax up over 2% today to a record high! Losing has never felt so good. NATO chief, Rutte, insisted that Ukraine will be involved in any peace talks and, apparently, the Kremlin agreed that its foe should be involved “in one way or another”. European leaders also chirped up a chorus that they will not be ignored or disregarded. A show of force or more likely a lunge for some kind of relevance. Zelenskyy said Ukraine won’t accept any deals made between the US and Russia in its absence, like he has any option. Just make it end!

Don’t blink, folks, you’ll miss it! Things are moving so fast now. Lethargic Europe may be apprehensive about coming peace, but Asian trading took it as a bearish sign! As they should have of course! The entire complex is bearish from oil to aluminium via gas and power! We rejoice for beaten down Europeans even if they can’t see how good losing is sometimes. From the open at almost $75, Brent quickly sold off, dumping 50c. The Asians seemed content with a good day’s work and let Brent hover near $74.50 for the remainder of the session. Europe’s entry naturally led to some choppiness and Brent closed at $74.67/bbl. Look at page 2 for a rundown of key contracts’ dump– gas, fuel oil, gasoline and diesel all got hit!

Trump did it and is ending the Ukraine/Russia war!!!! Our joy! Senseless deaths of young sent to fight by old will stop and Europe can stop its economic bleed. Details are being worked out but Russian molecules, gas, liquids and solids will flow back into Europe. A shot in the arm to moribund Germany! This is bearish for crude; it’ll be shipped normally. For diesel, fuel and lighter products too. Shipping routes will be cut again so instead of going from Russia to India for refining and back to Europe, it’ll flow direct to Europe. Bad for shippers, good for consumers. We feel bullish Europe again. Trump’s soliloquy on Truth Social stated in no uncertain terms the mutual respect with Putin and how well their phone call went. They spoke about all sorts of stuff. Including (among other things): Ukraine, the Middle East, Energy and AI. Putin apparently echoed Trump’s “COMMON SENSE” campaign slogan and Trump said the war must end and that “our respective teams [will] start negotiations.” An end to the needless campaign of destruction is in sight! At last! It’s just debilitatingly sad it’s taken 3 years to get here… US Secretary of Defense, Hegseth, said returning to the 2014 borders is “unrealistic”. This is huge! Everything’s changing fast.

Our sources in China report that one cargo ready to discharge to the account of PetroChina was affected by the prompt enactment of the 10% tariff on crude imports from the US. Including the freight cost, PetroChina would face a tariff bill around $8.00/Bbl. This would force PetroChina to redirect the cargo elsewhere. But separately our sources in Beijing say, not too many cargoes are scheduled to ship in from the US. So, regarding tariffs, one source says, “ready steady, go”. The Dubai window has really settled into a pattern for February: lots of bidders outnumbering the sellers, but nobody stepping up to set the pace, all afraid to pick up the Totsa mantle. On the sellside, only Chevron and Reliance actually got involved today, while the buyside was awash with bidders – the usual suspects, Vitol, Equinor, PetroChina being some of the most active – raising bids, but they seemed largely to concur that sellers were asking for too much.

And when we thought we had seen it all, some compliance folks are now set to lose their jobs while others have permission to loosen the purse strings. Just as the inimitable Trump swishes in and stops the enforcement of the Foreign Corrupt Practices Act to Further American Economic and National Security. In other words ! Here is the link: https://www.whitehouse.gov/presidential-actions/2025/02/pausing-foreign-corrupt-practices-act-enforcement-tofurther-
american-economic-and-national-security/. He adds: “overexpansive and unpredictable FCPA enforcement against American citizens and businesses — by our own Government — for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security.” No need to carry brown bags it’s routine, and it is ok!

The Chinese are back, the economy is firing, the Indians remain short and the products market is not too bad. So the market is set on going higher! Brent flat price liked the feeling of heading upwards it got yesterday and this morning decided it wanted another hit. After ending the Asian session at $76.69/bbl, it just kept going, even challenging $76.80/bbl by 09:30 GMT and the front spread finally got some relief, building back up towards 50c. Remember, keep an eye on the Brent structure’s move against the Dubai structure. The spread between Brent and Dubai is now $2.61/bbl and has narrowed by 17c since yesterday. Please take note that the Dubai flat price is nearing $80.00/bbl, very expensive a consumer would say and kudos to the producers. And for those lifting term barrels are paying $1.50/bbl premium on top of the nearly $80.00/bbl.

The Officials Team is launching a Liquidity Report covering major futures markets and also key swap instruments. The Report contains average daily traded volumes for five working days periods and compares them with the previous five working days giving an indicator of liquidity flows into major instruments from week to week. You may consider this, as we do, as a momentum financial indicator into or out of an instrument. In addition, we also provide comparison with the previous year which gives an indication of a discrepancy year on year. These are indicators that are used to market practitioners.

The market is turning. And crude is up and breaking through the downward channel. Why? Gasoil/heating oil have been supporting crude, but gasoline tanked in the West today. And fuel oil is the darling. Brent found support at $74.10/bbl Thursday and is now perking up. Just yet, not convincingly, if gasoline is in trouble.
Throughout the London morning, Brent climbed towards $75.50/bbl, where it settled in for the rest of the day until rising through the window. Despite this flat price recovery, the front month spread remained stubbornly in the low 40c region, apart from some very brief lunges to 46c. By the close, it had declined again, to 43c. Even as the Dubai structure is doing its utmost to hold onto its recent strength (the physical premium was still $3.34 as of this morning), Brent’s structure has suffered since early Feb.