AMERICAS OIL: Americas Open - WTI crude is holding onto the net gains
US OIL: Americas Open - WTI crude is holding onto the net gains so far this week after the smaller OPEC output rise for November than some prior reports had suggested. The market continues to monitor the impact of strikes on Russian energy infrastructure while focus today is on the latest EIA weekly inventory data. Initial firm resistance has been defined at $66.42, the Sep 29 high. Clearance of this level would highlight a reversal.
- A soft outlook was reflected in the EIA’s October report as it is forecasting global oil inventories to build through next year pushing Brent down to $52/bbl from $62/bbl in Q4 2025. Global output rises across its forecast horizon driven by non-OPEC. It doesn’t believe OPEC will be able to achieve its higher production targets.
- The EIA has raised its forecast for global oil demand in 2025 by 0.2mb/d to 104.0mb/d while demand for 2026 is stable at 105.1mb/d.
- API data yesterday showed a US crude stock build of 2.8mbbl and with a 1.2mbbl draw at Cushing. Gasoline stocks drew 1.2mbbl and distillates fell 1.8mbbl.
- EIA US weekly inventories are due for release today despite the US government shutdown. Crude stocks are expected to show a build of 0.50mbbl and with a draw for both gasoline and distillates, a Bloomberg survey shows.
- Softening time spreads last week had suggested an easing of tight near-term supplies although backwardation has strengthened this week with the prompt spread gaining towards the highs from late September.
- Goldman Sachs forecast an average surplus of 2mb/d in Q4 and 2026 leading to rising stockpiles, weaker time spreads and lower prices, according to Bloomberg.
- WTI futures have recovered from the most recent low print - a correction. A bearish theme remains intact. Last week’s sell-off resulted in a move through key support and the bear trigger at $60.85, the Aug 13 low. Clearance of this level strengthens the bear threat and paves the way for an extension towards $57.50, the May 30 low. Initial firm resistance has been defined at $66.42, the Sep 29 high. Clearance of this level would highlight a reversal.
- Crack spreads are mostly steady ahead of today’s EIA data release, which is expected to show a draw in stocks for both gasoline and distillates.
- WTI NOV 25 up 1.4% at 62.59/bbl
- US gasoline crack down 0.1$/bbl at 17.81$/bbl
- US ULSD crack up 0.2$/bbl at 33.32$/bbl
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SECURITY: US And EU Edge Closer To New Russia Sanctions 1/2
President Donald Trump told reporters yesterday, “certain European leaders," will visit Washington on Monday or Tuesday, without naming specific leaders. Trump also noted that he would likely speak with Putin in the coming days.
- Reuters reports that the EU sanctions envoy David O’Sullivan is in Washington with a technical team to discuss Russia sanctions. EU Council President Antonio Costa said today the EU’s new Russia sanctions are being closely coordinated with the US, per Reuters.
- Bloomberg notes: “Last week, Trump demanded more economic pressure from Europe on Putin, including a total halt to purchases of Russian oil and gas, according to Finnish President Alexander Stubb. The US leader also called on Europeans to apply pressure to China, he said.”
- Kremlin's spokesman Dmitry Peskov told reporters this morning that no sanctions will ever be able to force Russia to change course on Ukraine, per RIA.
- Peskov said: “Europe and Ukraine are doing everything they can to draw the United States into their orbit,” referring to Trump's comments about new sanctions on Russia.
- Military Analyst Mick Ryan writes on his Substack that Russia is engaged in “a large-reinforcement and surge of operations” in Eastern Ukraine. The acceleration in Russian operations is shown in the "increase in average daily losses,” according to Ryan, suggesting that a ceasefire agreement in the short-term is remote.
Figure 1: Russian Daily Losses, March 2022 – July 2025
Source: Mick Ryan, UK MOD
SECURITY: US And EU Edge Closer To New Russia Sanctions 1/2
The US and EU appear closer to coordinating new sanctions on Russia as diplomacy fails to unlock a ceasefire, but political obstacles are likely to undermine the process. On Saturday, Russia launched its largest aerial bombardment of Ukraine since 2022, with a government building in Kyiv hit.
- President Donald Trump told reporters yesterday he is “not happy” with President Vladimir Putin’s intensifying bombardment of Ukraine and obfuscation of a bilateral meeting with President Volodymyr Zelenskyy. He responded 'yes' when asked if he is ready to enact new sanctions.
- Treasury Secretary Scott Bessent told NBC yesterday, “We are prepared to increase pressure on Russia, but we need our partners in Europe to follow.”
- FT reported a short time ago EU officials are in discussions on "potential sanctions against China and other third countries for purchasing Russian oil and gas." According to the report, the measures are "unlikely to be adopted unless the US also targets China’s energy imports," which may be unlikely as Trump administration officials have refrained from measures against China during trade talks. Moreover, as sanctions need EU unanimity, they could be torpedoed by Russia-leaning Hungary or Slovakia.
- There are also concerns that secondary sanctions on China will not substantially impact crude flows, as demonstrated by China’s trade in sanctioned Iranian barrels.
Figure 1: Most missiles and drones fired by Russia at Ukraine since February 2022
Source: Sky News, Ukrainian Air Force
PIPELINE: Corporate Bond Update: Bank of Nova Scotia 4Pt on Tap
- 09/08 $Benchmark Bank of Nova Scotia 3NC2 +75, 3NC2 SOFR, 6NC5 +100a, 6NC5 SOFR
