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OIL: Mid-Day Oil Summary: Crude Highest Since Mid-Oct

OIL
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Crude futures are ticking up today to their highest levels since Mid-October as Saudi Arabia’s above-expectation rise in its OSPs signals a potential pickup in Asian demand.

  • Brent MAR 25 up 0.4% at 76.8$/bbl
  • WTI FEB 25 up 0.4% at 74.27$/bbl
  • The market continues to expect excess supply in 2025 with demand from China likely to remain soft and non-OPEC supply forecast to rise with the risk OPEC+ decides to begin output normalisation.
  • The Brent crude options bearish skew to the puts has narrowed back to near parity with risk of a market surplus in 2025 and uncertainty over the impact of Chinese economic stimulus measures on demand and the Trump presidency on US and Iran output.
  • Saudi Arabia raised its February Arab Light OSP to Asia by $0.6/bbl to +$1.50/bbl for Asia, compared with an increase of between $0.2/bbl and $0.5/bbl expected in a Reuters and Blomberg surveys.
  • The Biden administration plans more sanctions on tankers carrying Russian crude, Reuters sources said, as the US increases pressure on Russia before President-elect Donald Trump takes office on Jan. 20.
  • Rising OPEC and non-OPEC supply is expected to outpace demand growth leading to an oil market surplus of 700kb/d in 2025, according to Morgan Stanley cited by Bloomberg.
  • Iran’s observed crude and condensate exports fell to 1.66m b/d in December, according to preliminary estimates, cited by Bloomberg.
  • Iranian crude oil supply is predicted to see a modest decrease of 0.3mb/d to 3.25mb/d by Q2 2025 due to the expected tighter sanctions from the incoming Trump administration, according to Goldman Sachs.
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Crude futures are ticking up today to their highest levels since Mid-October as Saudi Arabia’s above-expectation rise in its OSPs signals a potential pickup in Asian demand.

  • Brent MAR 25 up 0.4% at 76.8$/bbl
  • WTI FEB 25 up 0.4% at 74.27$/bbl
  • The market continues to expect excess supply in 2025 with demand from China likely to remain soft and non-OPEC supply forecast to rise with the risk OPEC+ decides to begin output normalisation.
  • The Brent crude options bearish skew to the puts has narrowed back to near parity with risk of a market surplus in 2025 and uncertainty over the impact of Chinese economic stimulus measures on demand and the Trump presidency on US and Iran output.
  • Saudi Arabia raised its February Arab Light OSP to Asia by $0.6/bbl to +$1.50/bbl for Asia, compared with an increase of between $0.2/bbl and $0.5/bbl expected in a Reuters and Blomberg surveys.
  • The Biden administration plans more sanctions on tankers carrying Russian crude, Reuters sources said, as the US increases pressure on Russia before President-elect Donald Trump takes office on Jan. 20.
  • Rising OPEC and non-OPEC supply is expected to outpace demand growth leading to an oil market surplus of 700kb/d in 2025, according to Morgan Stanley cited by Bloomberg.
  • Iran’s observed crude and condensate exports fell to 1.66m b/d in December, according to preliminary estimates, cited by Bloomberg.
  • Iranian crude oil supply is predicted to see a modest decrease of 0.3mb/d to 3.25mb/d by Q2 2025 due to the expected tighter sanctions from the incoming Trump administration, according to Goldman Sachs.