Christmas outages

ICE Brent crude prices rebounded, with ICE Brent February contract touching 75 $/b while time spreads were back in backwardation. Indeed, outages in OPEC countries continue to stack, with Libyan production likely to be down by 0.8 mb/d due to political tensions between the NOC and the oil ministry. Yesterday, we also learned that Shell had declared force majeure on its Forcados port January loading program (200 kb/d on average). The situation around Ecuador’s pipeline outage appears to be unresolved too. This will likely leave the Atlantic sweet crude market tight throughout Q1 22, despite a seasonal slowdown in refining runs. In the US, crude stocks continued to draw by more than 6 mb, without a significant export number as many expected the ad valorem tax incentive to influence US balances throughout year-end. Gasoline stocks built by more than 5 mb, a good sign for 2022 RBOB’ summer balances. Jet demand, at 1.5 mb/d, continued to be increasingly close to 2019’s pre-COVID levels while stocks continued to be drained.