Brent crude futures rose 43 cents, or 0.9%, to $46.49 a barrel by 0522 GMT, while U.S. West Texas Intermediate crude rose 45 cents, or 1.1%, to $43.51 a barrel.
Yesterday marked a big step in the administration of Biden, where the handover of power began from Trump in advance of the president-elect due to take over in January, yet the legal challenges are still taking place.
The second largest oil producers of the OPEC cartel- Iraq- have nearly reached the limit in accepting the OPEC ‘one size fits all’ policy that takes into no account of the members sociopolitical situations said the Deputy prime minister of Iraq. The Deputy PM is at the limit of accepting these rules and output quotas given the precarious position that other members who may not have a sovereign wealth fund as a buffer. (S&P Global Platts)
Hedge funds have become more bullish on oil over the past week, with funds buying more barrels as the hope of a vaccine brings with it the expectation of more air travel and business activity. Hedge funds acquired the equivalent of 69 million barrel of the most 6 important oil futures, making the total barrels acquired over 182 million barrels in the past two weeks. (Reuters)
Barclays has kept its oil forecast above the average price to make $53 per barrel in 2021, thanks to the Covid vaccine that should be widely available in the new year, but the short-term high efficacy vaccines will be a turning point for the wider recovery from the pandemic. (Reuters)
INDEX: (MTD Estimates)
* Sing 380: 269.49
* Rott 3.5%: 248.73
* Sing 0.5%: 333.26
* Rott 0.5%: 310.36
MARKETS NEWS:
* China’s Pandemic Air Travel Boom Offers Hope for Fuel Producers
* Brent’s Nearest Timespread Flips to Backwardation: Chart
* Some U.S. Crudes Premiums Trending Higher Amid Wider WTI-Brent
* Saudi Arabia Claims Houthis Attacked at Aramco Oil Facility
* WAF-ASIA TRACKER: China Boost to Lift Exports to Four-Month High
* EPIC Midstream Texas Crude Loadings Resume After 3-Month Halt
* Sonangol Sells Five January Crude Cargoes in Tender, Spot Offer
* California Map Requests Point to Limited Fuel Use After Curfew
* Mexican Oil Ports Reopened Saturday After 5 Days Shut
OTHER NEWS:
* Libya’s State Oil Firm Withholds Funds in Feud With Central Bank
* Triple-Leveraged Products Killed by Oil Crash Rise From Dead
* U.S.’s Oil-Crash Report Offers Few Answers for Wild Trading Day
OIL PRODUCT NEWS:
* U.S.: Map Requests Show Californians Driving Less
* EUROPE: Diesel Flow to U.S.; Gasoil Bullish Bets Up
* ASIA: China Eyes Refining Crown; Naphtha Cracks
ECONOMIC DATA: (Times are London.)
* 9:30pm: API weekly U.S. oil inventory report
* EARNINGS: Motor Oil; Lukoil IFRS results
ANALYST VIEWS/COLUMNS:
* Global Oil Demand to Fall in 4Q, Stay Flat in 1Q: Raymond James
* OIL MKT RESEARCH: Positive Refining Signs, Floating-Storage Down
Rotterdam 3.5% INDIC
Dec20 264.75 / 266.75
Jan21 264.25 / 266.25
Feb21 263.50 / 265.50
Mar21 262.50 / 264.50
Apr21 261.50 / 263.50
May21 260.25 / 262.25
Q1-21 263.50 / 265.50
Q2-21 260.25 / 262.25
Q3-21 256.00 / 258.00
Q4-21 250.75 / 253.75
CAL21 255.25 / 258.25
Singapore 380 INDIC
Dec20 283.00 / 285.00
Jan21 280.00 / 282.00
Feb21 278.75 / 280.75
Mar21 277.75 / 279.75
Apr21 276.75 / 278.75
May21 275.75 / 277.75
Q1-21 279.00 / 281.00
Q2-21 275.75 / 277.75
Q3-21 272.25 / 274.25
Q4-21 268.75 / 271.75
CAL21 271.25 / 274.25
Sing 10ppm GO INDIC
Dec20 50.85 / 50.99
Jan21 50.90 / 51.10
Feb21 51.13 / 51.33
Mar21 51.46 / 51.66
Apr21 51.79 / 51.99
May21 52.09 / 52.29
Q1-21 51.15 / 51.35
Q2-21 52.09 / 52.29
Q3-21 53.09 / 53.29
Q4-21 53.81 / 54.01
CAL21 52.44 / 52.84
Rott VLSFO 0.5% INDIC
Dec20 330.50 / 335.50
Jan21 331.00 / 336.00
Feb21 331.50 / 336.50
Mar21 332.00 / 337.00
Apr21 332.50 / 337.50
May21 332.75 / 337.75
Q1-21 331.50 / 336.50
Q2-21 332.75 / 337.75
Q3-21 333.50 / 339.50
Q4-21 335.00 / 341.00
CAL21 333.00 / 339.00
Singapore VLSFO 0.5% INDIC
Dec20 355.00 / 360.00
Jan21 353.00 / 358.00
Feb21 352.25 / 357.25
Mar21 351.75 / 356.75
Apr21 351.75 / 356.75
May21 351.75 / 356.75
Q1-21 352.50 / 357.50
Q2-21 352.00 / 357.00
Q3-21 352.25 / 358.25
Q4-21 353.75 / 359.75
CAL21 352.25 / 358.25
ICE Gasoil 10ppm INDIC
Dec20 377.09 / 379.09
Jan21 380.90 / 382.90
Feb21 384.61 / 386.61
Mar21 387.20 / 389.20
Apr21 389.72 / 391.72
May21 392.11 / 394.11
Q1-21 384.25 / 386.25
Q2-21 392.16 / 394.16
Q3-21 399.37 / 401.37
Q4-21 404.61 / 406.61
CAL21 395.10 / 397.10
Steel margins remains supported at CNY 301; however, the iron ore market has now started to come under pressure with yesterday’s futures closing 1.12 % lower at USD 123.35. Price dropped from a six year high after BHP flagged near-term downside risks to Morgan Stanley at a roundtable last week. BHP cited a rebound in Brazilian production, record run rates from Australian producers as well as elevated inventories of iron ore lump and pellets. (Bloomberg) A lower close is suggesting that market longs are paying heed to this, now we need to see if there is going to be some bear revenge to try and squeeze them out.
The Capesize index continues to underwhelm at this point, rising just USD 124 today (+1%), leaving the futures little room for maneuver as upside sellers remain heavy. Dec futures did trade as high as USD 13,625 early on but buying support soon waned with the futures closing 1.7% lower, at USD 13,275. Movement in the Q1 futures has been very rangebound with the price 0.3% lower at USD 8,200 but in a tight range of only USD 125. The Cal 21 on the other hand closed 1% higher at USD 13,100. We have seen this before in the market where the Cal has shown the direction before the rest of the curve, it will be interesting to see tomorrow as momentum will need to see a clear shift higher to support any form of sustained bull move.
December Panamax has been the mirror to the Capesize today with the futures closing 1.7% higher at USD 10,775. Early gains failed to see any follow through as the market looks to the physical to see if this market is currently sustainable. The technical is asking questions with the market looking vulnerable, however without confirmation this intraday trend remains bid, with sellers not yet willing to take it on. Q1 21 closed 1.3% higher at USD 8,737 and the Cal 21 0.8% higher at USD 10,050.
All bets were off this morning when the December Supramax traded above the USD 10,550 Fractal resistance, resulting in a high of USD 10,825, up 5.4%. The December looks to have the support of the index, which was up USD 247 to 10,473 today, suggesting there could be more upside in this move now the market has created a higher high. Q1 21 closed 3.5% higher at USD 8,437 with good volume changing hands, whilst the Cal 21 closed 1.1% higher at USD 9,212. If the Supramax keep holding at higher levels having made a higher high, then it could have the Panamax bulls looking to test the USD 11,400 fractal resistance in the December, and with it the resilience of the market bear.
We questioned the Brent futures on Friday having made some bold calls earlier in the week. We should have kept faith as the futures are 1.7% higher at USD 45.87. We highlighted the market would need to see some good news for it to push higher. Unfortunately, it has not been good news, it has been an event. Brent and WTI are both pushing higher after Bloomberg reported armed militants had attacked Libya’s National Oil Corporation headquarters in Tripoli. Will it be enough to fulfil its technical destiny? It has made a higher high, it has fulfilled it achieved the minimum for cycle completion.
Data source FIS and Bloomberg
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