World of Oil Derivatives

In this episode of The Officials, Jorge, Ed, Will, and Mita dive deeper into the evolving world of electric vehicles and how they're affecting the energy markets. In China, data is highlighting surging sales of new EV models and insurance registrations - likely thanks to the rapid advancements in quality and affordability. They also touch on how broader Chinese economic confidence, credit trends, and real estate developments are influencing spending patterns and demand for resources.

The Officials also discuss global geopolitical tensions, including missile developments in the Russia-Ukraine conflict, recent political maneuvers of Western powers, and the International Criminal Court issuing an arrest warrant for Netanyahu.

Mita analyses U.S. gasoline and diesel inventory trends, exploring how seasonal factors like Thanksgiving travel and tight supply conditions will affect market dynamics. With Thanksgiving coming up next week, we'll see if gasoline demand spikes as expected.

Connect with The Officials on LinkedIn:

Jorge Montepeque: https://www.linkedin.com/in/jorge-montepeque-38410bb6/

Will Cunliffe: https://www.linkedin.com/in/will-cunliffe-45899a182/

Edward Hayden-Briffett: https://www.linkedin.com/in/edward-hayden-briffett/

Mita Chaturvedi: https://www.linkedin.com/in/mita-chaturvedi/

Group CEO Greg Newman is joined by Onyx Direct Trader Vicky Chen for a special episode of the CEO's Address. Vicky discusses the experience and learnings she's gained since she joined Onyx seven years ago with no prior direct trading experience.

 As Vicky's been with Onyx, the team has expanded to provide enhanced direct trading services in more languages and in more regions. She and Greg discuss the challenges involved in providing services and market updates to clients 24/5 - and how onyx plans to continue expanding these services. They also discuss the specificities of the Chinese market (Vicky's main focus) and the overall Chinese attitude towards trading.

This episode of Oil Insights was recorded on 19th November, 2024 at 1:30pm GMT.

Onyx Research Associate Martha Dowding joins Group Head of Research Harry Tchilinguirian to discuss price action in the oil market over the past week. In the two weeks since Trump's election, oil price has seen little movement, while the equity market has seen remarkable change.

While cryptocurrency value has increased off the back of Trump's election, what's to come for the oil market once he's in office remains unclear. From his proposed tariffs to the US' "drill baby drill" production motto, the future of the US - and global - economy remains up in the air. Meanwhile, OPEC+ supply cuts, China's weak macroeconomic data =, and fluctuating geopolitical tensions are playing their roles in relatively stable Brent price.

This week on Trading Corner, Senior Oil Derivatives Trader, James Anderson  discusses key developments in the oil market with Head of Desk, Manny Newman. They dive into post-election market dynamics, refinery margins, and the impact of seasonal turnaround cycles. James shares insights on the Brent vs. Products spreads, China’s influence on global crude prices, and potential shifts in U.S. export dynamics.

Manny and James also tackle the interplay between distillate cracks, freight movements, and broader geopolitical factors, including Iranian exports and OPEC production. As we approach the holiday season, Manny and James explore how low liquidity and key events like Thanksgiving could influence market volatility.

Plus, James and our Manny debate the best trade strategies of the week—short-dated Brent vs. bullish deferred crude spreads. 

This episode of Macro Mondays aired live at 12:30pm GMT on Monday, the 18th of November. Tune in Mondays at 12:30pm UK time to watch Macro Mondays live. 
On today's episode, James and Will dive into the latest macroeconomic developments shaping global markets.
 
Last week, Bitcoin, S&P 500, and NASDAQ hit all-time highs - but whether this rally will continue is unclear thanks to rising yields. Meanwhile, US Dollar strength is causing havoc with EURUSD & USD Yuan making multi-month lows, and causing more distress in EMG with USDINR at all-time highs.
 
CPI and PPI are both rising for the first time since September 2022. Lorie K Logan from the Fed has said that the US Central Bank will most likely need to make more interest rate cuts. Dogecoin spiked following Trump's announcement of the DOGE (Department of Government Efficiency), co-headed by Elon Musk, it has risen 170% in the last 4 months. Bitcoin is now the 8th-largest asset in the world, just behind Saudi Aramco.
 
We saw mixed Chinese data, strong retail sales but weak industrial production and falling house prices, and OPEC cut their global oil demand growth forecast for the 4th consecutive month. German data continues to look weak, both IFO and ZEW came in below expectations, and UK unemployment has jumped form 4.1% to 4.3%.
 
The team also take a look at the upcoming economic data schedule and the equities market.
 
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In this episode of The Officials, Jorge, Ed, Harinder and Dr. Wu explore the latest trends in global energy dynamics and political shifts, and deep dive into the rapidly changing landscape in China - where electric vehicles (EVs) are taking over, significantly impacting gasoline and diesel demand. They discuss startling stats, the shift to EVs in major Chinese cities, the competitive tech race, and the broader economic implications - including substantial reductions in daily transportation costs. 

The Officials also tackle the dilemma OPEC faces, balancing production cuts amid declining Chinese demand and potential price impacts.

The discussion moves to the geopolitical sphere, dissecting President-elect Trump's cabinet nominations and their implications. They discuss trade tariffs that could disrupt European economies and drive deglobalisation and analyse how these political manoeuvres might influence global oil prices and the economic strategies shaping the energy markets.

The Officials also explore what a strengthened dollar means for investors, speculate on Musk's influence, and examine how upcoming policies could affect both the U.S. economy and international relations. 

This episode of Oil Insights was recorded on 12th November, 2024 at 12pm GMT.

Onyx Research Associates Mita Chaturvedi, Martha Dowding, and Vincent Wu join Group Head of Research Harry Tchilinguirian to discuss the direction of oil prices in the wake of President Donald Trump's election. The team reviews the potential outcomes of a second Trump presidency in relation to his policy proposals and aims to express their implications through trading ideas.

A second Trump presidency can have strong demand or supply repercussions. Vincent will examine the potential for more US crude oil supply and exports and their incidence on the relative pricing of WTI, Brent, and Dubai. Martha will look at how the potential for lighter regulation, particularly regarding renewable fuel mandates, will impact the US gasoline market. Finally, Mita delves into how future US trade policy, with heavy tariffs to be applied to China, can affect naphtha in Asia.

We’d love to hear from you! If you’d like to get involved with our podcast, please leave a comment on this video on our YouTube page. What is your favourite oil Trump trade. You can also listen to the podcast on Spotify, Apple Music, or Google Play.

Disclaimer:  Any recommendation, prediction, or suggestion as to an investment strategy has been prepared by Onyx Capital Advisory Limited (“Onyx”) in accordance with legal requirements designed to promote the independence of investment research (“Research”). This research is directed at, and therefore should only be relied upon by, clients who have professional experience in matters relating to investments. Onyx’s Research is not directed at retail clients or those in a jurisdiction in which this distribution may be restricted by local regulation or law. Onyx’s publications are prepared without taking into account your specific investment objectives and financial situation, therefore before acting on any information, you should consider its appropriateness. Onyx’s Research should not be regarded as a substitute for obtaining independent professional advice, including investment, tax and legal advice. 

Onyx’s policy is to only publish Research that is impartial, independent, clear, fair, and not misleading. Any views expressed are those of Onyx’s at the time the Research was prepared. No assurances or guarantees are given as to the reliability, accuracy, or completeness of any such information or any matter contained in Onyx’s Research and such Research may contain statements which are matters of judgement and which are subject to change at any time without notice. Onyx accepts no duty or liability, whatsoever, to any party in respect of its Research. Under no circumstances will Onyx be responsible for any losses incurred (whatever their nature) by its clients resulting directly or indirectly from the use or interpretation of any information contained in its Research. Such Research is solely produced and published by employees of Onyx and based on publicly available information. Past performance is not indicative of future performance.

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In this episode of Trading Corner Manny Newman and Jonah Van Bourg dive into the aftermath of the recent U.S. presidential election and its implications on the markets. They break down how a potential Trump administration could influence risk assets like equities and bitcoin, with conversations around short-term bullish expectations driven by policy changes. Manny and Jonah look at the energy sector, examining how Trump's approach might affect oil and energy markets and discuss possible shale oil production increases, aggressive tariff strategies, and the geopolitical impacts on Russian and Middle Eastern oil supply.
 
They analyse market reactions and explore futures positioning, touching on key drivers like election day sell-offs followed by afternoon rallies. As traders approach year-end, they talk about risk aversion, the influence of geopolitical risks, and the challenge of trading in a structurally oversupplied oil market.
 
Manny and Jonah also provide contrasting outlooks on oil prices: Manny foresees a downward flush before any potential recovery, while Jonah believes the market has already bottomed out.

This week, market volatility took centre stage, spurred by the perceived inflationary policies under Trump. His election victory led to a steepening yield curve, with 10-year yields surging nearly 19 basis points, and market-based inflation expectations—like 5-year breakevens—also jumped significantly. Equities responded optimistically, with the S&P 500 up 3.3% and the Nasdaq climbing 4.5%, buoyed by hopes of deregulation.

The energy sector’s reaction was mixed; Trump's past policies affecting Iranian exports could signal a return to stricter measures. Renewable energy stocks, however, faced setbacks, with Sunrun notably impacted. Meanwhile, the Federal Reserve cut rates by 25 basis points, with Chair Powell hinted at a potential slowdown in further cuts, even as employment remains central to future decisions.

Internationally, the Bank of England reduced its base rate, and euro yields tumbled, driven by safe-haven demand and inflation risks. Simultaneously, China showed signs of economic recovery, with a surprising export surge and positive PMI data. Additionally, Beijing announced a substantial 10 trillion-yuan debt refinancing package, but the measures fell short on the consumer measures markets had hoped for.

James and Will unpack how these global financial shifts impact investors and the broader economic landscape.

Group Head of Research, Harry Tchilinguirian,  is joined by Chief Economist at Argus Media, David Fyfe for a special episode of Oil Insights. David brings over 30 years of experience in energy market analysis, from the International Energy Agency (IEA) to Gunvor and now Argus Media, where he delivers deep insights into oil market dynamics, geopolitical risk, and macroeconomic fundamentals.

With the election of Donald J. Trump as the 47th President of the United States, Harry and David explore the potential impacts on the oil market through both economic and geopolitical lenses. From sanctions on Iran and Venezuela to shifting alliances in the Middle East and implications for OPEC+, they delve into what a Trump administration could mean for global oil supplies and prices.

David and Harry discuss the complex web of relationships involving sanctioned nations, including the evolving US-Russia dynamic and how Trump's rapport with Saudi Arabia and Israel might influence geopolitical stability. They also explore the ramifications of Trump's trade policies, especially with China, and the possible effects on global economic growth and oil demand.

On the domestic front, they analyse the prospects for US oil and gas production under Trump’s energy policies and whether we could see a revival of the "drill baby drill" mantra. Finally, Harry and Davis assess the current state of oil market fundamentals as 2024 nears its close, the ongoing debate around oil demand forecasts, and OPEC+'s options in managing supply amid an uncertain market outlook.

#oott #oil #oilandgas #energy #derivatives  #economics #Trump #Election #Harris #2024Election