The trading frenzy in the North Sea is sparking speculation about the price of Brent crude oil

The North Sea crude oil market, which typically sees a lull in December, recorded the most trading activity on record in a single day on Monday, as trading giants and oil majors secured a total of eight cargoes.

Seven of these eight cargoes carry crude oil grades that help underpin the Dated Brent benchmark, the world’s most important and closely watched benchmark for crude oil, used to price more than three-quarters of the world’s traded oil.

Unusually high trading activity earlier this week could push Brent crude oil prices higher, as similarly frantic trades did midway through this year.

But the OPEC+ group’s decision on production cuts for next year, as well as the state of China’s economy and oil demand in the near term, are likely to have a greater impact on market sentiment.

On Monday, eight loads for delivery in the second half of December were traded in Platts’ North Sea price window. This is the highest amount of data compiled by Bloomberg since 2008.

Four loads WTI Midland were traded during the window, as well as one each from Brent, Forties, Oseberg and Johan Sverdrup.

Norwegian energy giant Equinor sold five of those cargoes, while trading giant Gunvor sold the other three. The buyers were the French supergroup TotalEnergies and the trading giant Trafigura, as well as a cargo bought by BP.

Of all the grades traded on Monday, only Johan Sverdrup’s crude is not used to underpin the dated Brent benchmark.

The Brent crude oil benchmark is underpinned by the value of North Sea Brent, Troll, Ekofisk, Forties and Oseberg crude oils, as well as US West Texas Intermediate Midland crude oil was added reach international standards in June 2023.

The large trades in the North Sea crude oil market could have an impact on the benchmark, as was already observed at the beginning of the year.

At the end of June, weeks of upward movements in North Sea crude oil grades, which underlie the international benchmark Brent, led to a rally Brent crude oil Prices.

Trading giants Gunvor and Trafigura bought and bid Dozens of North Sea crude cargoes in June, pushing the benchmark Brent crude price above $86 a barrel.

Back then, purchases of North Sea crude by major commodity trading houses triggered an immediate rise in benchmark Brent prices as market sentiment turned bullish after trading giants bid heavily for these crude grades.

This week the price of WTI Midland rose compared to Monday, after a record eight cargoes were traded on Monday and a further three WTI Midland cargoes were traded in the Tuesday window, according to calculations by Reuters.

Monday’s record-breaking trading activity could have some impact on Brent prices, but these will be much more impacted in the near term by whatever OPEC+ decides at the December 5 meeting with ongoing production cuts.

The latest market speculation is that OPEC+ is discussing it Extension by three months its production cuts by the end of the first quarter of 2025, Reuters reported on Tuesday, citing unnamed sources from the group.

There are also many unknowns for the beginning of 2025, including China’s oil demand, the conflicts in Ukraine and the Middle East, and the new Trump administration in the White House. All of this could affect oil prices in one way or another.

Brent crude oil prices are expected to rise averaged $74.53 per barrel A monthly Reuters poll of dozens of analysts showed last week that experts revised their price outlook downward for the seventh straight month.

Brent prices are expected to average $74.53 a barrel in 2025, below last month’s estimate of $76.61 a barrel, as weaker global demand growth and ample supply offset the impact of a potential delay of OPEC+ cuts, 41 analysts and economists said the survey.

By Tsvetana Paraskova for Oilprice.com

More top reads from Oilprice.com