Reports

The Feb’25 Brent futures flat price initially saw a decline this afternoon from around $74.10/bbl at 12:00 GMT to $73.60/bbl at 14:05 GMT, before recovering to $74.40/bbl at 17:50 GMT (time of writing). Bullish sentiment has persisted as Russia launched an extensive aerial attack today on Ukraine’s power grid, using 93 missiles and nearly 200 drones, as per Reuters. Ukrainian officials stated six unspecified energy facilities were damaged in the western region of Lviv, in addition to serious damage to thermal power plants, according to DTEK, Ukraine’s largest energy provider. In other news, the presidential decree banning Russian companies from selling oil and petroleum products at the price cap set by the G7 countries has been extended until the end of June 2025, according to Russian news agency Interfax. Finally, US-based Kosmos Energy said it is in early preliminary discussions to buy Tullow Oil, with a view to potentially expanding their African oil assets. Kosmos currently has oil production and exploration assets in basins offshore Ghana and Equatorial Guinea, while Tullow Oil owns offshore production platforms in Ghana, Gabon and Cote d’Ivoire. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.39/bbl and $1.67/bbl, respectively.

The Feb’25 Brent futures contract initially saw weakness this afternoon, falling from $73.60/bbl at 12:00 GMT down to $72.45/bbl around 16:10 GMT, before recovering to $73.65/bbl at 17:30 GMT (time of writing). Crude oil prices were elevated amid reports that Israel is preparing for potential strikes against Iranian nuclear infrastructure, according to The Times of Israel. In the news today, the Kremlin has stated that Russian President Putin backs Hungarian Prime Minister Orban’s efforts to achieve a Christmas ceasefire in Ukraine and a major exchange of prisoners of war, as per Reuters. In other news, Saudi Arabia plans to ship 46mb of crude oil to China in January, the highest volume since October and significantly higher than the 36.5mb of volume expected in December, as per Reuters. Sinopec and PetroChina is expected to lift more crude, as well as non-state owned refiners Rongsheng Petrochemical and Shenghong Petrochemical. Finally, Germany’s oil product sales increased 6.2% y/y to 7.602 million tons in September, with heating oil recording the highest rise of 45.9% y/y to 1.114 million tons and jet fuel seeing the biggest decline of 18.7% y/y to 0.714 million tons, according to BAFA. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.39/bbl and $1.67/bbl, respectively.

The Feb’25 Brent futures contract was supported this afternoon, rising from $73.00/bbl at 12:00 GMT up to $73.40/bbl at 17:50 GMT (time of writing). In the news today, OPEC’s monthly report has cut oil demand growth forecasts for this 2024 by 210kb/d to 1.6mb/d, marking the fifth consecutive month the cartel has reduced its demand projection, as per Bloomberg. Meanwhile, crude oil production from all OPEC members rose by 104kb/d in November m/m, due to increased output in Libya, Iran, and Nigeria, according to OPEC’s secondary sources. Nigeria’s oil production hit its highest level for 2024 in November with a total of 1.7mb/d (+13.3% m/m) of crude oil and condensate output. In other news, Exxon has unveiled plans to increase spending to $28-$33 billion annually with a goal of lifting oil and gas output by 18% by 2030. Furthermore, Exxon aims to triple its production in the Permian Basin to 2.3mb/d by 2030 and pump 1.3mb/d in Guyana, as per Reuters. Finally, At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.36/bbl and $1.45/bbl, respectively.

The Feb’25 Brent futures contract saw strength this afternoon, increasing from $71.80/bbl at 12:00 GMT up to a touch above $72.50/bbl at 17:50 GMT (time of writing). In the news today, Equinor stated that the start-up of their Johan Castberg oilfield in the Arctic has been postponed to January or February 2025 due to poor weather conditions. Johan Castberg, located in the Barents Sea, holds estimated recoverable volumes of 450mb to 650mb of crude oil and will be able to produce 220kb/d at its peak, according to Equinor. In other news, China National Petroleum Corporation (CNPC) said that Chinese oil demand could peak at 770 million metric tons as early as 2025 owing to the adoption of EVs and LNG trucks. This time last year, CNPC expected a peak of between 780-800 million metric tons in oil demand coming to China by 2030. Finally, Chevron has completed upgrades to its refinery in Pasadena, Texas, which is expected to increase processing capacity of lighter crudes by nearly 15% to 125kb/d. At the time of writing, the Feb/Mar’25 and Feb/Aug’25 Brent futures spreads stand at $0.32/bbl and $1.30/bbl, respectively.