The markets are caught in a geopolitical grip, with low volatility but watching closely for clues on the outcome of the USA-led peace negotiations between Ukraine and Russia, with European partners watching from the sidelines. A sudden peace deal could be a gamechanger and drive positivism into the markets while raising doubts how sanctions on Russia would stand.
Across the Atlantic, the US Navy build-up outside Venezuela and declaration of closed airspace is also being followed closely by the oil market. Is it only a war on drugs or could this escalate further? Meanwhile, the Iranian regime is still under pressure for a nuclear deal and this could also suddenly influence oil prices. COP30 did not deliver any major outcome and the markets did not move at all.
The financial markets are awaiting developments and probably will have delivered a 0.25 per cent cut in Federal Reserve funds while the European Central Bank is on hold. Inflation levels are slowly moving upwards, standing at three per cent in the USA and 2.2 per cent in the euro zone.
The euro has been very stable, currently standing at 1.165, slightly higher than reported in last month’s ICR and still in the range of US$1.15-1.20. Brannvoll ApS forecasts a range of US$1.10-1.25 in 2026, with an average of US$1.19.
| PRICES AT A GLANCE - 5 December 2025 | ||
| Brent crude oil – bbl | US$63.50 | |
| Coal API 2 | 1Q26 | US$96.50 |
| Cal 2026 | US$99.00 | |
| Coal API 4 | 1Q26 | US$91.00 |
| Cal 2026 | US$92.00 | |
| Petcoke USGC 4.5 per cent S 40HGI | FOB | US$75.00 |
| CFR ARA | US$102.00 | |
| Petcoke USGC 6.5 per cent S 40HGI | FOB | US$69.00 |
| CFR ARA | US$96.00 | |
Oil
The situation in Venezuela, negotiations with Iran and continued Ukrainian attacks on Russian oil installations have led to a premium to the Brent price, as the markets are oversupplied, according to the Energy Information Administration (EIA), and a fair level could be seen below US$60/bbl.
OPEC+ will review its baseline calculation and for now keeps its production cuts steady. The EU has decided to ban imports of Russian gas and oil from 2027 and 2028, respectively. Russian gas currently makes up for 12 per cent of imports despite several sanctions. It remains to be seen if these sanctions will persist if a peace deal is struck in Ukraine. Oil remains in a range of US$61-67, dictated by geopolitics. Brent oil is unchanged at US$63.50.
TTF (Cal26) gas price has decreased 15 per cent to EUR26.50 and EU gas storage has fallen to 73 per cent, still below the previous two years. Brannvoll ApS forecasts a lower Brent price trading range of US$55-80 and an average of US$68 for 2026.
Coal
Coal has fallen slightly in the wake of no specific news. Russia has kept discounted supply in the markets and Colombia has been seeing lower exports. Although there were some disruptions in output from Australian ports due to demonstrations these did not lead to any impact.
India has increased its domestic production, while China has imported less in the autumn – all lowering demand on the seaborne market and keeping prices low in November-December.
The API2 1Q26/front quarter (FQ) contract slipped five per cent MoM to US$96.50, with an expected range of US$95-102. The Cal26 contract fell five per cent to US$99. API4 1Q26/FQ contracts fell by two per cent to US$91, seeing a short-term range between US$90-98.
Brannvoll ApS predicts a FQ contract range of US$85-115 and with an average of US$100 and API4 in a range of US$80-105 in 2026.
Petcoke
FOB prices remain steady in the petcoke market but with slightly lower discounts due to lower coal prices. Reduction of year-end stocks and less Chinese and Turkish buyers was off-set by reduced supply from the US Gulf producers.
The petcoke market has seen high volatility in the freight prices, but this has kept FOB pricing steady. Venezuelan exports may be in a wait-and-see situation, lowering the supply of 4.5 per cent S product. The spread towards 6.5 per cent S petcoke remained at US$6.
The USGC FOB 6.5 per cent contract rose one per cent MoM to US$69.00 and the discount to API4 was down to 39 per cent. The USGC ARA 6.5 per cent contract unchanged MoM at US$96.00, while the discount fell further to 20 per cent.
The USGC FOB 4.5 per cent S contract rose one per cent MoM to US$75.00, with the FOB discount to API4 at 34 per cent. The CFR ARA 4.5 per cent contract rose one per cent at US$102.00, with the discount down to 15 per cent.
Brannvoll ApS expects a 2026 range for the ARA 6.5 per cent between US$85-105 with an average of US$95 and discount of 25 per cent.
By Frank O. Brannvoll, Brannvoll ApS, Denmark
