The Officials

Happy Friday, folks! Hope you are enjoying the activity in the Dubai window, because in swaps the market is “dead today” according to a Dubai trader. But one person is still playing the game, at least! Glencore’s keeping the activity in partials hot, grabbing every single one of the 70 trades in today’s window. Unlike previous sessions, though, most (36) were sold by Equinor, with Hengli coming second, selling only 10 times, while Exxon, Shell, Trafi, BP, Reliance, Sinochem and Unipec
were all there but selling in single digits really. We saw three more convergences this morning as Equinor, Hengli and Shell all declared an Upper Zakum cargo each to Glencore. Meanwhile, the physical premium edged up to 50c, but the running monthly average is now at 66c, already 23c lower than November’s trading average.

Suddenly, democracy and voting are back in vogue! Zelenskyy conceded to the idea that Donbas (and the rest of Ukraine) could vote on its future, after agreeing to hold elections if there are security guarantees. But even that concession did little to spur a flat price reaction and it simply continued to inch downwards, reaching the European close at $60.95bbl – the lowest since late October.

Shiver our timbers! The late American session had Brent climbing all the way to $62.70 after the Venezuelan tanker hijacking. But the Asians don’t care and it fell steadily through their trading this morning, back to $61.60/bbl by the close. As one Chinese source said, “Venezuelan just happens to be cheap”. It’s not a coincidence that Venezuelan is so cheap, as only China touches it!

Ok, $62 wasn’t that comfy after all! Brent slid through the early afternoon to the mid-$61 range. The speedbump of weekly EIA stats didn’t do much to alter the direction and flat price reached the European close at $61.51/bbl.

$62 feels comfy. For now. The lofty heights of $64 were too scary for the vertigo of flat price and the plummet back down has abated just around that mark – it reached the Asian close at $61.97/bbl. The brief interlude of ups and downs has seemingly cooled and Brent is only 76c lower than a week ago, hardly a yawning chasm of price action… Let’s look for fun somewhere else.

It’s magnetic! Brent just can’t break away from the low-$60s level. Yesterday’s decline turned into another long sideways march through today’s session, as February Brent meandered slowly before dropping in the afternoon to reach the European close at $61.97/bbl. The curve is also getting a belting, as the prompt spread tumbled to 30c by the close, and Q4 spreads are slipping into contango again! Weakness is the name of the game at the moment, in the North Sea too…

In the week ending 5 December 2025, exchange traded futures volumes were significantly higher w/w across instruments in the first three tenors except the February Brent futures contract, which fell 7.29%. But March and April tenors showed robust weekly growth. WTI, on the other hand, showed major increases across all three tenors, with the February contract up over 60%. Heating oil, gasoil and RBOB futures all reported higher traded volumes across the strip, with the lowest increase in April gasoil, which rose just 3.24%.

Saudi allocations for January are in and they are big! Much higher than the softish volumes of recent months. Theallocations totalled 49.5 million bbls vs a paltry 36 mil bbls in December and 39.5 mil bbl in November. It was the big boysgetting more, as allocations to both PetroChina and Rongsheng got an extra 8 mil bbl from the previous month, back to “Bizas usual”, as a source said. Smaller volumes are allocated to the likes of Cnooc and Fujian – and Hengli got nothing at all!

A pipeline leak and temporary shutdown of the 460 kb/d Iraqi West Qurna 2 field sent Brent flat price back up above $63 at lunchtime following the morning slump. Lukoil’s force majeure declaration didn’t lead to a halt in flows but a leaky pipeline is an insurmountable hurdle for the embattled field – it shouldn’t take too long to fix, though. But the market is very tired and quickly slipped back to under that point again, finally reaching the London close at $62.79/bbl.

ADNOC couldn’t catch the speedy Saudis out of the gate this month in the OSP race. The Saudis were very quick last week. ADNOC OSPs came out early this morning and Murban (set as the average of IFAD settlements over last month) for January loading is set at $65.53, down 26c from the December OSP. But it’s in the diffs where things get interesting!

Above $64 for the first time since 19 November! We told ya! Do not believe the super glut narratives, throw them in the bin, above the heads of all the short only consultants, ship trackers and bankers. A surge just before 14:30 GMT from under $63.20 to a high at $64.10 by 15:30. It moved down through the window to hit $63.76/bbl by the close. But the prompt spread didn’t keep up with that and rose only a few cents to 42c before falling back to 40c by the close.

Love and kisses and sweet nothings in the ear. The love, the love… just flowing among long-time friends. Putin and Modi are really the best of friends. Anybody feeling jealous? Trump, Rubio? It is obvious that some like to treat countries with a stick and others with carrots and this approach yields predictable results.

OSPs came early! The Kingdom decided to surprise us on another quiet day and announce their OSPs for January. The Saudis didn’t disappoint and delivered what the change in Dubai structure implied – a 40c cut for Arab Light to Asian destinations, bringing the OSP down to just 60c over the Oman and Dubai average. This is the lowest since 2020 folks! Cuts were seen across all grades: Arab Extra Light was trimmed by 20c to $1.10, while Arab Medium and Arab Heavy were cut by 60c to -55c and -$1.90, respectively.

Rhetoric is ramping. Mr Medvedev isn’t a fan of the idea Europe could use frozen Russian assets, calling it a “casus belli” and threatening they could be returned as reparations “by Russia’s fallen foes”. As a Russian source commented, “Now we have clarification what qualifies as war for Russia”.