What the OFAC is Going on? | S6 E20

World of Oil Derivatives

Brent futures opened at $87.50 per barrel, seeing a $1 decrease due to promising ceasefire negotiations, with a Hamas delegate heading to Cairo on Monday. The market is rather sanguine on geopolitical risk, and has been de-risking over the past week, with open interest in ETFs seeing a substantial decline.

Looking to the refinery margin changes, the prompt European margin increased slightly over the week as stronger products outweighed stronger crude. There was notable strength observed in gasoline, naphtha, and 3.5% barges.

This week, James focuses on mixed U.S. data, featuring weak GDP headlines but strong inflation components, potentially posing challenges for the Federal Reserve. Powell's press conference at this week's Fed meeting will be closely watched.

In the "Googling Oil" segment, the prevailing headline revolves around oil pricing falling on Monday, signalling the possibility of Israel and Hamas engaging in ceasefire talks this week.

Vincent's trade idea this week is to go short on the Q3 EBOB crack. You can find more details here: https://youtu.be/5CEovEVKGhI

If you would like to connect with any of our hosts on LinkedIn, please click on the hyperlinks below:
Greg Newman: https://www.linkedin.com/in/oilderivatives/
James Brodie: https://www.linkedin.com/in/jamesbrodiecmt/
Martha Dowding: https://www.linkedin.com/in/martha-dowding-ab84801a6/
Vincent Wu: https://www.linkedin.com/in/vincent-wu-099816125/
Chapters for this episode are:
0:00 Welcome
1:00 Brent Futures
7:06 Macro market news
18:28 Refinery margins
25:51 "Googling oil:" world oil news
30:02 One to watch
32:36 Trade idea of the week
36:27 Poll results and outro