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Onyx Markets launched in January – how is it going so far?

We had an initial flurry of clients when we signed up and the last week has helped that too, but it’s still early days.

When we started out, the idea was to be a more broad based broker, with a specialisation in more niche oil products. Now that we’ve got over the line and launched, it’s made us sit back a bit and realise we do actually have time to think more about how we market and structure the business.

I would say we are actually quite unusual because of our background in oil trading. So we have unique products there and great expertise. And the result is that we have some more professional clients, who want to trade smaller contracts on an OTC basis. You have another subset who are looking to hedge their exposure to fuel products. And then you have the more ‘classic’ retail business.

When I first saw Onyx enter the market, I thought it was kind of random to be honest. You have this large market making arm that’s very much in the institutional world. Can you explain what the thinking was behind the decision to launch a retail arm?

You are half right but if you look at a lot of players, across asset classes, in the market making space, they have all been eager to get more market share from retail. It’s just that they mostly do that via liquidity relationships, not going direct to the end client.

For Onyx, the driver was more that the company has become a victim of its own success. If you look at its market share in some products, it can be around 40%. When you reach that sort of level, you start looking for more avenues to grow. Entering the retail market was one way to do that.

The other push factor was just looking at the opportunity. Oil products are niche but there is demand for them. Since launching, the corporate uptake of the business has been good and that’s because people like the CFD wrapper and structure of the products we’re offering. We’re also going to launch an oil ETC and the demand is there for a similar reason – people want exposure to oil but not necessarily via the contracts that exist at the moment.

I would also say it fits with the ethos of the founders too. Onyx is not an old company. In less than a decade, they have grown into a huge business. So I think part of it was also just the challenge of taking on a new market, like they did with oil swaps when they started the company, and pushing for growth.

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The Jan’25 Brent futures contract weakened further this afternoon, trading at around $74.90/bbl at 12:00 GMT and selling-off from $74.85/bbl at 14:10 GMT down to $73.95/bbl at 17:45 GMT (time of writing). Crude oil prices fell as Hurricane Rafael is forecast to weaken and move away from the US Gulf Coast oilfields in coming days, the US National Hurricane Center said.

In the news today, Iran’s oil loadings fell from nearly 1.83mb/d in September to 1.48mb/d last month, marking a daily decline of 350kb/d, according to Kpler Senior Analyst Homayoun Falakshahi. The Wall Street Journal reported that US President Trump plans to renew his ‘maximum pressure’ campaign against Iran, drastically increasing sanctions in order to hamper Tehran’s ability to support its proxies in the Middle East.

In other news, Iraq’s parliament is due to discuss a new bill on oil exports, a Kurdish MP Sabah Subhi told Kurdistan24. Subhi was optimistic an agreement between Iraq and Kurdistan could be reached, however, highlighted growing security concerns surrounding potential supply disruption in Iraq, claiming any instability would be “catastrophic”.

Finally, the Israeli military it is planning to reopen the Kissufim crossing into central Gaza to increase flow of aid into the strip, amid growing pressure from aid agencies. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.30/bbl and $1.12/bbl, respectively.

The Dec’24 TTF rebounded in early November due to winter demand concerns, Norwegian outages, and the looming Ukraine-Russia gas transit expiration. European LNG imports rose for the first time in 10 months, while Asia’s declined. The Dec’24 JKM softened to just above $13/MMBtu on mild temperatures and secure North Asian supply. The JKM-TTF Basis fluctuated, influenced by weak Chinese demand and tight European supply.

The Biden administration is rushing to finish a study that could complicate President-Elect Donald Trump’s goal of quickly approving new LNG export terminals. The study, initiated in January, assesses the climate, economic, and national security impacts of increased US LNG exports. Biden had imposed a moratorium on new export licenses, which Trump has pledged to lift on his first day in office. If the study finds additional exports problematic, it could lead to legal challenges against swift approvals. The Energy Department aims to complete the study by 20 Jan but faces a tight timeline.

Russia’s “shadow fleet” of LNG carriers is facing mounting obstacles. Following Palau, Panama has de-flagged four Russian-owned ships tied to sanctioned Arctic LNG projects, leaving them stranded in Russian waters. US sanctions and complex ownership networks have put more pressure on Russia’s attempts to bypass restrictions, with Panama’s actions signaling a wider crackdown.

Spain is preparing to deliver its first reloaded cargo to Turkey in three years, as strong demand in the East Mediterranean has made re-exports economically feasible. However, low inventory levels at Spanish terminals are likely to restrict additional reloads in the near future.

BP has finalized a substantial 10-year charter extension with Flex LNG for two 173,400-cbm carriers, Flex Courageous (2019) and Flex Resolute (2020), with the potential to extend until 2039. The deal is valued at hundreds of millions of dollars.

As part of its strategy to expand its LNG business, TotalEnergies has signed a sales agreement (HoA) with Sinopec to supply 2 million tons of LNG annually for 15 years, starting in 2028. This significant agreement enhances TotalEnergies’ long-term presence in China’s LNG market, the world’s largest. It follows a strategic cooperation agreement between TotalEnergies and Sinopec, signed earlier this year during President Xi Jinping’s state visit to France.

Federal regulators have approved Venture Global LNG to bring natural gas into its Plaquemines export plant in Louisiana, moving it closer to full operation. Expected to be the second-largest US LNG export facility, it will help the U.S. maintain its lead as the world’s top LNG exporter and make Venture Global the second-largest US LNG producer.

The Jan’25 Brent futures contract weakened this morning from $75.10/bbl at 07:00 GMT down to $74.50/bbl at 10:25 GMT (time of writing). Crude oil prices weakened amid the unveiling of China’s $1.4 trillion stimulus package. Chinese officials neglected to announce additional measures to boost domestic demand, potentially disappointing markets according to a Financial Times report.

In the news today, Petrobras reported a 22% increase in its Q3’24 net profit at $5.7 billion. This was partly due to several operational milestones including the start of oil production at Petrobras’ Mero-3 platform with a capacity of 180kb/d and at their FPSO Maria Quiteria with a capacity of 100kb/d.

In other news, Citigroup claimed a Trump presidency may be net bearish for crude prices on higher domestic production and tariffs. Meanwhile, Standard Chartered said US producers won’t necessarily heed Trump’s call for more drilling. Finally, the UN Human Rights Office stated that women and children account for nearly 70% of fatalities it has verified in the Gaza war thus far, condemning what it called a systematic violation of the fundamental principles of international humanitarian law, as per Reuters. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.32/bbl and $1.27/bbl, respectively.

It was a historic week for the US as someone had to change Grover Cleveland’s Wikipedia from ‘only’ to ‘first’. Landslide results, comparable to 1964, point to a similarly anxious America, with Google searches for ‘WW3’ up 15% in the week and worryingly, searches for ‘who is running for president’ seeing a 200% weekly increase. LBJ’s 1964 “We must love each other, or we must die” may be too sentimental and ‘nineteen sixties’ for Trump 2.0, but “I’m going to stop wars” and “let’s stop killing people”, but it inspires some hope that the geopolitical risk volatilities may lessen. The market has a few months of processing time to check the effects of tariffs, regulations, sanctions, and drill baby drill, but the initial market reaction has been a bit measured.

The possible sanctions on Venezuela and Iran, and the potential relief from the Russian sanctions have been the supply conversation points. Still, we’re talking long-term here, and the immediate impact on the flat price was quickly reversed by some offshore drilling evacuation. There are a few months to prepare before the official handover for Nancy Pelosi to clean out her portfolio of anything green whilst the Dems figure out who to point the finger at.

In crude, the Dated Brent physical reversed on 6 Nov which contributed to a volatility breakout in structure. The Bal-Nov DFL gapped down to $0.10/bbl. This weakness dragged down back-end structure which spurred buy-side hedging flows in the 2-to-3-week rolls, possibly for West African cargos. Given the sudden selling intensity, we think this is a localised weakness and does not indicate broader bearish fundamentals.

In fuel oil, HSFO weakened with Dec’24 Euro cracks down to -$9.90/bbl pressuring spreads down the curve. 380 E/W rose to $10.00/mt but was capped at $9.00/mt due to selling. 180 was firmer with Dec ’24 Visco reaching $13.25/mt, though Balmo selling added pressure. Early strength saw Dec/Jan’25 Sing 0.5% reach $9.75/mt. Later, Dec Sing cracks dropped to $11.90/bbl, and Dec/Mar ’25 to $18.25/mt. Europe held firmer but still followed Singapore lower, with the 0.5% E/W narrowing to $47.00/mt in Dec ’24 and consistent selling in 2025 quarters.

In distillates, prompt ICE Gasoil crack peaked at $17.15/bbl, settling at $16.25/bbl, pressured by a 2.9mb US distillate build. Singapore gasoil softened, with the Bal-Nov/Dec spread narrowing to $0.75/bbl. European jet demand stayed rangebound, while HOGOs weakened on low US winter demand, expected to rise with holiday travel.

In gasoline, RBOB has been the star of the show, with a well-bid RBBR supporting the entire gasoline complex. There was a failed bear play in the East, which led to a short squeeze. EBOB has been weak in the front, but supported in the deferred amid back-end arb selling after the US elections.

This week, the naphtha market saw rising bearishness amid consistent selling of the Dec/Feb’25 MOPJ spread from trade houses and majors amid weakening cash in the NWE and MOPJ window. The E/W is still bid, and NWE naphtha has seen selling, with only Q2’25 gasnaph selling supporting it.

In NGLs, the strength in US propane was driven by a bullish stats reading and stronger exports, in line with a narrowing LST/FEI. CP and NWE are currently the strongest performing international propane benchmarks, with the former driven by robust demand and the latter by supply tightness concerns with US exports mainly directed towards Asia.

The Jan’25 Brent futures contract rallied from $74.25/bbl at 12:00 GMT today up to $75.70/bbl just after 17:30 GMT (time of writing). Crude oil prices rose amid expectations of a 25 basis point Fed rate cut to be announced at 19:00 GMT tonight.

Earlier today, the Bank of England cut interest rates by 25 bps from 5% to 4.75%. In the news today, Hezbollah lawmaker Ibrahim al-Moussawi said that the Lebanese group welcomes any effort to stop the conflict but does not pin hopes for a ceasefire on any particular US administration, as stated in a Reuters report.

In other news, China’s crude oil imports remain low in October at 10.53mb/d (-9% y/y), marking the sixth straight month where oil imports have fallen compared to the same months in 2023, according to data from the General Administration of Customs. This follows reduced capacity at PetroChina’s largest refinery in Dalian and weak demand from independent Chinese refiners.

Finally, Ghana’s crude oil output has increased by 10.7% y/y in the first six months of 2024, at 24.9mb for June 2024, the country’s Public Interest and Accountability Committee (PIAC) reported. The increase was primarily driven by Tullow Oil’s Jubilee South East (JSE) project, which commenced production in late 2023, as per Reuters. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.37/bbl and $1.44/bbl, respectively.

The Jan’25 Brent futures contract saw weakness this morning, trading from $75.20/bbl at 07:00 GMT down to $74.30/bbl at 11:20 GMT (time of writing).

This selling likely highlights rising uncertainty as traders weigh in the likely impact of another Trump Presidency on the oil market. An added source of volatility comes from Hurricane Rafael, which has hit Cuba as a Category 3 hurricane. Rafael is presently expected to weaken before hitting the US Gulf Coast, with the threat to oil production declining to ~1.55mb/d – possibly contributing to today’s weakness.

Finally, the market will also be shifting its attention away from the US election to interest rate announcements by the US Federal Reserve and the Bank of England, with both central banks expected to cut 25 basis points.

In other macroeconomic news, German chancellor Olaf Scholz fired Finance Minister Christian Lindner and has said he would call a vote of confidence in his government early next year. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.33/bbl and $1.27/bbl, respectively.

The Jan’25 Brent futures contract saw strength this morning, trading from $75.05/bbl at 07:00 GMT up to $75.39/bbl at 10:45 GMT (time of writing). Crude oil prices have been supported amid potential for Hurricane Rafael to disrupt 4mb/d of oil production in the US Gulf Coast, according to Reuters.

In the news today, Russian oil and gas revenue has jumped 57% m/m in October to $12.35 billion, as per Russian finance ministry data. Meanwhile, a Bloomberg report shows RThe Jan’25 Brent futures contract strengthened this morning from $74.30/bbl at 07:00 GMT up to $74.58/bbl at 10:50 GMT (time of writing). Price action was choppy this morning as traders adjust their positions in light of US President Trump’s victory in the US election. At the time of writing, Trump holds 277 of the 270 electoral votes required to win, while Harris holds a total of 224.

In addition, prices were pressured by a much higher than expected 3.13mb build in US crude oil inventories, according to API data for the week to 01 Nov. In the news today, Iran’s Revolutionary Guards deputy chief Ali Fadavi stated that Tehran is prepared for a confrontation with Israel and would not rule out a preemptive strike by the US and Israel following Trump’s election win, according to the Times of Israel reposted in a note by Giovanni Staunovo. In other news, Iraq is expected to start delivering crude oil from Kurdistan to its state-owned company SOMO, with a $16/bbl rate set for foreign oil companies operating in Iraqi Kurdistan, as per Reuters.

Deliveries of Kurdish crude oil were previously suspended for over a year amid a dispute between the central Iraqi government and Turkey over authorization of the deliveries. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.38/bbl and $1.48/bbl, respectively.

The Jan’25 Brent futures contract saw consistent strength this afternoon, ultimately increasing from $74.60/bbl at 12:00 GMT to $75.30/bbl at 17:40 GMT. Crude oil prices rallied from around $73.40/bbl at 13:50 GMT up to $75.92/bbl just after 16:00 GMT as the market reacted to increasing threats to US Gulf Coast oil production from Hurricane Rafael and US President Trump’s election victory.

A build of nearly 2.15mb compared to an expected 1.8mb in US crude oil inventories for the week to 01 Nov, announced in EIA data released at 15:30 GMT, led to a 40c drop to $74.95/bbl but otherwise had little effect as Brent continued to strengthen. In the news today, Russian Energy Ministry data showed the nation’s crude oil production in October was at 8.97mb, up 3kb/d from September and just 5kb/d above the OPEC+ quota for the month.

In other news, Iraq’s oil exports were recorded at 3.3mb/d in October, according to Oil Ministry figures, with the government continuing to restrain output in response to pressure from OPEC+. Finally, India’s oil demand rose by 2.9% y/y in October to nearly 20.04 million metric tons, with gasoline, LPG, and aviation turbine fuel accounting for the largest increases in demand, according to PPAC reposted in a note by Giovanni Staunovo. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.39/bbl and $1.52/bbl, respectively.

The Jan’25 Brent futures contract saw strength this morning, trading from $75.05/bbl at 07:00 GMT up to $75.39/bbl at 10:45 GMT (time of writing). Crude oil prices have been supported amid potential for Hurricane Rafael to disrupt 4mb/d of oil production in the US Gulf Coast, according to Reuters.

In the news today, Russian oil and gas revenue has jumped 57% m/m in October to $12.35 billion, as per Russian finance ministry data. Meanwhile, a Bloomberg report shows Russia’s seaborne crude weekly exports for the week to 3 Nov dropped by 530kb/d, the biggest decline since early June. This came as Russia made no shipments from the Arctic port of Murmansk and only one shipment from Novorossiysk on the Black Sea.

In other news, France’s foreign minister Jean-Noel Barrot is expected travel to Israel on Wednesday to work towards a diplomatic end to the conflicts in Gaza and Lebanon. Barrot stated France would work with whoever wins the US election and that the US “plays an essential role in ending the Israeli-Arab conflict”.

Finally, trading firms are projected to deliver an unusually large volume of about 5mb of Middle East crude oil to the Shanghai International Energy Exchange (INE) this month, as per Reuters. Vitol are to deliver the most crude to INE, about 3mb, including about 840kb of Abu Dhabi Murban crude and 2mb of Iraqi Basra Medium crude. At the time of writing, the Jan/Feb’25 and Jan/Jul’25 Brent futures spreads stand at $0.43/bbl and $1.65/bbl, respectively.