Uncertainty from OPEC+

Despite a rather weak expiry, expectations of demand were boosted on the December 2021 ICE Brent contract by comments from the Chinese government starting to acknowledge the depth of the energy crisis in China. Energy supplies must now be secured at all costs according to the energy and industrial sector supervisor. 

Internal OPEC sources said that the group could decide to increase their monthly production by more than 400 kb/d, given the mounting global inflationary pressures. The option of increasing production by 800 kb/d and zero the next month may also be considered, which would be at odds with global physical prices as the only source of demand strength was been in the Far East delivered grades like Sokol or ESPO, mostly heading to the Shandong region, where private refiners are located. The meeting will be held on Monday.

Looking at refined product stocks, Singapore inventories were depleted at a fast pace, 4 mb, amid a strong pull on fuel oil stocks pushing Asian cracks higher. European stocks in the ARA region were unchanged w/w