The Officials
Punchy benchmark reports published twice each trading day, bringing visibility into the physical oil markets.
The Officials: Murban: Shaken not stirred
An onslaught of Murban! After declaring 2 Murban cargoes to Vitol yesterday, PetroChina declared another pair to Vitol today. But that wasn’t all! Gunvor and Exxon both earned themselves a convergence with the Chinese mega seller today and PC granted each of them a Murban convergence as well. That was Exxon’s first of the month and April’s total convergence tally now stands at 18 cargoes, all from PetroChina – of which 12 to Vitol.
The Officials: The Saudis open the taps
48 mil bbl! Mega! A huge set of Saudi allocations to Chinese refiners. A record breaker in fact, at least since The Officials publication began in June 2024. That’s a lot of crude shifting to the East. Rongsheng got the biggest share with a 15 mil bbl allocation but it was Unipec’s monthly change that grabs the eye: from only 3 mil bbl in April, they’ve surged to 14 mil bbl for May!
The Officials: Clear as mud
More forecasters are bringing down their price expectations. The latest was Golman Sachs who is seeing Brent averaging at $63/bbl over the rest of this year. The weight of the tariff dislocations will lower US’ GDP by 1.4% as seen by The Havard Business Review. This will naturally result in potentially less demand for oil while OPEC is boosting output. Team Trump appeared to want to soothe some worries and massage the market’s angst. But it has royally backfired as Lutnick’s comments on recategorization of tariffs by sector has poured gasoline onto the bonfire of confidence in American policy. First, Apple was surely kicking itself for chartering hundreds of tonnes of iPhones from India into the US to escape the tariffs before electronics were granted an exemption. Then, others were probably wishing they’d copied that move as Lutnick revealed a whole new way of categorising and segmenting tariffs into “buckets” that simply compounds the chaos of the original announcements. Talk of buckets makes us think of a child at the beach building a sandcastle to protect himself from the rising tide…
The Officials: First blood
Things are getting ugly, folks! Angola just got whacked with a $200 million margin call by JP Morgan. The landslide begins with small stones and ends with the whole mountain collapsing… Even so, Team Trump continues to insist that the tariff plan is going well and the economy will be bouncing once the teething problems pass. Yeah, right… US Energy Secretary, Chris Wright, is wearing a tin hat, oblivious to reality. He called the market’s panic “misplaced”. But listen to him and you’ll hear that the long-term oil demand growth outlook is unchanged – get your head out of the sand!
The Officials: Investors abandon ship!
The Asians were in a good mood this morning and the positive vibes spread to flat price, which rose from barely $63 at the open to above $64.30. But then China got fed up and slapped the US with 125% tariffs and prices fell back by $1! Multi-dollar swings within minutes are becoming the norm… Get to safety! Gold is flying and hit a new all-time high of over $3230/troy ounce this morning. Talking of flying, capital is taking flight from the US as investors panic about Trump tantrums and the bond market is in a full rout – see more on the next page!
The Officials: The tariffed unite
Don’t worry everyone! It’s all “going to work out very well”. The man said so… And yet the Trumpster is pushing his enemies to make friends with his former friends. The EU and China are beginning negotiations to abolish tariff son Chinese EVs. How will Germany’s car industry survive an onslaught of cheap, competitive Chinese EVs without the protection of a nice tariff blanket? BMW, Mercedes-Benz and Volkswagen are surely quaking in their boots right now! They’re also still smacked with Trump’s 25% auto tariffs… International relations are all about tariff negotiations now. And promises to buy more US energy products keep raining down from countries keen to avoid tariffs. But US supply is being pulled in all directions! Domestic demand is growing, up over 1.7% y/y YTD, according to The Officials calculations based on EIA data, while the most recent data (referring to January) shows exports of crude and products down over 1% y/y and Kpler saw crude exports down nearly 4% YTD. As production is lacklustre and domestic demand is growing, where does Trump hope to find the extra slack to boost exports? It’s not like he can just drain the SPR to sell that abroad, as Cushing inventories are down almost 34% from their 5-year average – and that wouldn’t be popular anyway.
The Officials: The market twists Trump’s arm
The ‘Trump indicator’ (also known as flat price) went on a barnstorming rally last night after the 90-day reciprocal tariff delay. Trading with Trump is like playing poker with somebody who goes all in on every hand and then suddenly folds when he realises just how close to the cliff he’s teetering. As long ago as… Tuesday… Trump rebuffed questions about tariff pauses to allow negotiations for reconciliation. Until Wednesday afternoon!
The Officials: Trump blinks!
The Blink that Shook the World! Trump pauses most tariffs except against China. And Trump’s blink triggered massive short covering across markets from oil to equities. Trump wanted to buy the dip! “THIS IS A GREAT TIME TO BUY!!!” He told followers earlier today. He’s been spanked by the bond and equity market and to be fair by his moneyed followers who have lost trillions with his attack on free trade. The 90-day delay to the reciprocal tariffs (at 10%) made the market bounce – regardless of the upped tariffs on China to 125%. Brent jumped back up to $64.50 and US equities surged. There have been lots of bids buying the dip this week. However, nobody in the North Sea window wanted to do the same and we didn’t see a single bid! Nor was there an offer.
The Officials: Brent blasts into the fifties
Folks, we crashed through to the FIFTIES!!! It finally happened! The first time since February 2021. Serious times ahead as the market signals a collapse in demand not oil but anything else! A trade war is a disaster for everybody. The front spread fell to 34c briefly this morning but after the September tenor, the structure fell into contango! It only took a global trade war of colossal scale kicked off by one man’s whimsy and fancy to smash the global economy! And China hit back with 84% tariffs on the US today.
The Officials: Volumes cranked to the max
Boing!! Markets bounced today as Trump kept his mouth shut for most of it. No more Truth tirades rampaging about 1000% tariffs on everything coming into the US. And guess what! The economy enjoyed the calm: the S&P 500 surged over 4% at its peak and Nasdaq 100 jumped 4.4% but both pared their gains in the afternoon, as the White House said the additional 50% tariffs on China come into effect at midnight EST.
The Officials: The Liquidity Report Volume 1 Issue 9
For the week ending 4th April, our momentum table shows all contracts across tenors seeing robust growth in exchange traded volumes amid Trump’s tariffs and OPEC’s voluntary cut unwind from May. RBOB contracts increased the most, especially for the July and August tenors with 190% and 171% growth respectively. Of all contracts in the momentum table, June Brent saw the smallest increase, but still rose by 66.84%.
The Officials: Market rout takes a breather
The selloff finally takes a breather. After a 3-day massacre that had the bloodbath overflowing and flooding the bathroom, markets finally stabilised. From gold to oil via equities, markets are trying to find their feet. Brent steadied to close at $64.11/bbl, while equity markets bounced marginally.
The Officials: Panication stations!
‘If we fight, I might lose a leg but that’s ok because you’ll lose an arm and a leg’. This seems to sum up Trump’s approach to the world economy. But really, everyone’s losing their heads. Markets have been in chaos today, look no further than credit markets, where 10-year treasury yields traded in a wider range than in the entirety of March. Traders are battling against recessionary fears and tariff reproachment, headline by headline. But after all is said and done, China are unlikely to yield. According to our market sources, they expect no reproachment, China have had enough and an additional increase of 50% makes no difference this time. We can’t help but agree. China’s taken steady steps to depend less on exports to the US… But for the Donald, obviously, it’s worth it as your opponent loses more, who cares if your own economy is pounded and pummelled – they lose! Actually, we all lose!
The Officials: Meltdown Monday
It is Armageddon day! Global collapse and the world are facing an implosion in equity markets, commodities, hedge funds margin calls, name anything if values from houses to currency in your pocket and everybody is wondering what happened to the value of all those things. Even gold got hit, down 0.8%. Copper, the bell weather of the economy got spanked hard, down 5% today. Trump tariffs triggered a global equity market collapse from Japan to Canada and everywhere between. Trillions of dollars evaporated in the rout. We are not to side with Bill Ackman, a controversial hedge fund manager and a fervent Trump anything lover. But even he called for a 90-day tariff pause fearing ‘a nuclear economic winter.’ We think we’re still in the middle of the mushroom and pity those facing margin calls. According to sources across FX, Equity and Rates, “liquidity is poor leading to instances of price over shoots.” Investment grade credit remains fairly orderly but high-yield is becoming extremely volatile.
The Officials: $10 gone in 2 days!
10 dollars down in 2 days! The power of market pricing in the collapse in global trade. China’s bold retaliation delivered the coup d’grace and the flat price expired. We know it can be temporary if the grown-ups ask questions and say, what are we doing, we are all tied in. In the meantime, 50s is not out of question. The impact on the Gulf economies is severe and all hands should be on deck not to paint rosy demand pictures but to have serious chats with the US and its trading partners.