In the week ending 7 Oct, the M1 Brent futures contract saw a net decrease from 1 Oct levels, seeing highs of $66.41/bbl (1 Oct). Concerns over a supply glut further pressured prices early this week, alongside a more modest OPEC+ supply hike of 137kb/d, where markets were previously expecting a faster increase. The Nov’25 RBOB swaps crack saw highs of $12.96/bbl on 1 Oct before falling to $12/bbl as PENGASSAN called off its strike at Dangote refinery, pressuring prices. However, they recovered to $12.71/bbl by 7 Oct, possibly as the fire at Chevron’s 290kb/d El Segundo refinery boosted sentiment. Despite continued Ukrainian drone attacks on Russian refineries, this time to Orsk and Kirishi, their impacts were limited. ICE gasoil cracks fell to $23.11/bbl on 6 Oct before a recovery to $24/bbl on close.
This week in Brent, we anticipate money managers to trim length while adding to their shorts. Producers/merchants are expected to de-risk. Money managers are expected to trim length and add to shorts in both gasoil futures and RBOB. However, in RBOB futures, we anticipate producers/merchants to execute the inverse.
Overall, we expect a risk-on week for RBOB futures and gasoil and a risk-off week for Brent.
Further detailed information on other categories and contracts can be found in the report.
