Group 1: Oil Market Sentiment - Oil market sentiment has deteriorated despite a Federal Reserve rate cut and aggressive actions by the Trump administration, with ICE Brent trading slightly above $61 per barrel, marking a two-month low [2] - The International Energy Agency (IEA) has revised its 2026 oil oversupply forecast down to 3.84 million barrels per day (b/d), a reduction of 250,000 b/d from the previous month, while increasing its demand growth forecast for next year to 860,000 b/d [3] - Russian oil production has reached 9.367 million b/d, which is only a slight increase of 10,000 b/d compared to October, leaving it 165,000 b/d below its OPEC+ quota due to disruptions from Ukraine's drone strikes [9] Group 2: Chinese Oil Demand - Chinese term buyers have significantly increased their nominations for Saudi crude to 49.5 million barrels, up from 36 million barrels in December, as Saudi Aramco has reduced its Arab Light differential to its lowest level in nearly five years [4] Group 3: U.S. Oil Industry Developments - The Trump administration's recent seizure of a Venezuelan VLCC tanker en route to Cuba is part of a broader strategy to intercept more vessels, indicating heightened tensions and potential military options regarding Venezuela [5] - The recent Gulf lease sale, known as Big Beautiful Gulf 1, generated $300 million for the U.S. budget, with major companies like BP, Chevron, and Woodside Energy participating actively, and Chevron's bid of $18.9 million for a Keithley Canyon block being the highest [6] - TotalEnergies has completed its takeover of a 40% stake in the Mopane discovery from Portugal's GALP in exchange for a 10% interest in Total's Venus project, resulting in a nearly 20% drop in GALP's shares [7]

Oil Market Overview - Oil prices remained rangebound this week, with ICE Brent hovering around $63 per barrel as markets reacted to higher Russian oil export loadings and potential military action in Venezuela [2] - The curtailment of Kazakhstan's CPC Blend exports has been a bullish factor, but this was offset by Saudi Arabia's weak pricing for January, indicating lukewarm Asian demand signals for January-February 2026 [2] Saudi Aramco Pricing Strategy - Saudi Aramco has reduced its January official selling price for Asia-bound grades by 20-60 cents per barrel compared to December, with the Arab Light grade set at a $0.60 per barrel premium to Oman/Dubai, the lowest since January 2021 [3] Chinese Oil Purchases - Chinese independent refiners in Shandong province have been purchasing large volumes of Iranian crude at discounts exceeding $8 per barrel compared to Brent, sourced from bonded storage following the last 2025 import quota issued by Beijing [4] Chevron's Investment in Gas - Chevron announced the approval of a $2 billion Stage 3 expansion of the Gorgon LNG project off Australia's northwestern coast, focusing on the Geryon and Eurytion fields [5] Turkey's Gas Deal with Russia - Turkey's BOTAS has extended its natural gas import deal with Gazprom for another year, securing 16 billion cubic meters (bcm) of supply via the Blue Stream pipeline and 6 bcm from the Turkish Stream conduit [6] Chile-Argentina Oil Agreement - Chile's ENAP has signed a $12 billion term deal with Argentina's major oil producers, including YPF, Vista Energy, Shell, and Equinor, to purchase crude oil from Vaca Muerta over the next 7 years, fulfilling 35% of the company's total requirements [7] PetroChina's Gas Storage Acquisition - PetroChina has acquired three natural gas storage companies for $5.7 billion, marking one of the largest M&A deals in 2025, aimed at enhancing its geographic coverage and capacities for gas-driven power peak-shaving [8]

Core Viewpoint - Saudi Arabia is expected to reduce crude oil prices for Asia in January to the lowest premium in five years, aiming to maintain market share amid high supply and declining Middle East benchmarks [1]. Pricing Adjustments - Aramco is likely to cut the official selling price (OSP) of Arab Light crude by $0.30-$0.40 per barrel, setting the premium at $0.60-$0.70 per barrel above the Oman/Dubai benchmark for January loadings [2]. - The premium for January will be the lowest since January 2021, following a previous reduction in December from $2.20 to $1.00 per barrel [3]. Market Conditions - The market anticipates this price reduction due to a $0.30 decline in Middle East spot benchmarks in November compared to October, alongside increased output from OPEC+ [4]. - Saudi Arabia is raising production significantly, reflecting its largest share of OPEC+ quotas [4]. Upcoming Announcements - The pricing announcement from Saudi Arabia is expected next week, following the OPEC+ meeting, where producers are likely to maintain their decision to pause production increases in early 2026 [5]. - Saudi Arabia typically announces crude pricing around the fifth of each month, influencing the pricing strategies of other major Middle Eastern oil producers [6].

Core Viewpoint - Saudi Arabia has significantly reduced its official selling price (OSP) for crude oil to Asia in December, following the OPEC+ decision to halt output increases in early 2026 [1][3]. Group 1: Price Adjustments - Saudi Aramco will sell its "Arab Light" grade to Asian buyers at a premium of $1.00 per barrel above the Oman/Dubai average for December, a decrease of $1.20 from November [2]. - The Arab Medium and Arab Heavy grades were each cut by $1.40 to premiums of $0.05 and $0.10 per barrel, respectively, while the Arab Extra Light grade saw a drop of $1.20 to a premium of $1.30 per barrel [2]. Group 2: Market Dynamics - The price adjustments reflect a well-supplied Asian market with increasing crude volumes and Saudi Arabia's aim to maintain competitiveness and market share [4]. - The price cut provides a more attractive feedstock cost for Asian refiners, potentially stimulating increased term nominations or spot buying of Saudi crude [5]. Group 3: Demand and Supply Outlook - Traders are closely monitoring demand from Asian refiners for December, particularly whether spot flows of Saudi barrels will increase [6]. - The lower premium also indicates concerns about future demand and the risk of oversupply in the market [5].