This week in Brent, money managers are anticipated to take a risk-on stance, marginally adding to longs and shorts. In contrast, they are expected to turn risk-off in RBOB futures and gasoil by trimming length and adding to shorts. Producers/merchants are anticipated to be strongly risk-off in RBOB futures but heavily risk-on in Brent and gasoil.
Equities and precious metals both fell again (S&P500 -0.5%, Nasdaq -0.9%) as subprime bankruptcies emerge, banks warn about private credit risks, US imposes new sanctions on Russia and Trump threatens new export restrictions on China. I’m trying not to get too bearish but I’m struggling to find any good news, S&P500 and Nasdaq could be forming double tops here, but bonds are clearly telling a bearish market story, the OIS prices 116bp of cuts over the next year.
Gold and silver are now in a short term down trend, don’t listen to me, look at the charts and short-term moving averages. Leveraged positions have taken heavy losses over the last 2 days. ‘When a speculative bubble pops. The really bad losses are taken in the next two months as those who missed it buy the dip’ (Andy Constan @dampedspring)
A growing number of states are struggling, some already in recession, others right on the edge. Together, they account for nearly a third of U.S. GDP. The national economy isn’t there yet, but it’s clearly losing steam. (Chart 1, Mark Zandi, Moody’s Analytics)
Volatility in the AI Revolution is heating up. Quantum stock fell 20% on news of Google’s Willow Chip solving problems 13,000x faster than the best supercomputer using a new algorithm called Quantum Echoes. Then the quantum stocks rallied back 20% after hours on news that the Trump Administration is preparing equity stakes in quantum stocks. It would be unprofessional of me to suggest that they may be trying to prop up another corner of the equity market for another week…… *IONQ, RIGETTI, D-WAVE IN TALKS FOR GOVT. TAKING STAKES: WSJ …. NOTE: These companies trade at 200–900× forward sales — far above dot-com bubble levels. Analysts warn the sector is “disconnected from fundamentals.”
17 years after the financial crisis another subprime lender has gone under. PrimaLend Capital Partners filed for bankruptcy after months of negotiations with creditors, a sign of stress in a sector catering to low-income consumers
IT’S `PARTY LIKE IT’S 1999′ IN CREDIT MARKETS: JIM CHANOS
*US TARGETS ROSNEFT, LUKOIL IN LATEST ROUND OF RUSSIA SANCTIONS
*OIL JUMPS AS MUCH AS 2.5% AT OPEN AS US SANCTIONS RUSSIAN FIRMS
TRUMP ADMINISTRATION CONSIDERING PLAN TO RESTRICT GLOBALLY PRODUCED EXPORTS TO CHINA MADE WITH OR CONTAINING U.S. SOFTWARE; NEW EXPORTS CONTROLS COULD CURB EXPORTS ON WIDE RANGE OF GOODS TO CHINA
*CHINA’S HE LIFENG, BESSENT TO MEET IN MALAYSIA OCT. 24-27
Beyond Meat erased a 112% gain yesterday to close down -1%, after a week where its price spiked 1300%. Previously some 64% of the shares available for trading had been sold short as of the end of last month, then on Monday, Roundhill Investments said it added Beyond Meat to its Roundhill Meme Stock ETF, a big sign that meme-stocks had returned. Matt Maley, chief market strategist at Miller Tabak, said it all shows ‘froth in the market is still extremely high’. Retail traders are still pumping meme stocks, oblivious to the growing risks.
*BESSENT: MIGHT SEE CPI COMING DOWN NEXT MONTH, MONTH AFTER
If you are a believer in seasonality, then today is historically the best day to own $SPX for the next 3-months! (@RenMacLLC)………….. however Bank of America Securities said clients resumed selling U.S. stocks last week after briefly “buying the dip,” led by institutional and hedge fund outflows.
Banks warning about private credit quality while funding its growth….
Bank of America warns of forced stocks selling if credit problems persist
WELLS FARGO CEO CHARLIE SCHARF: CREDIT WILL DETERIORATE
*WAL 3Q PROVISION FOR CREDIT LOSSES $80.0M, EST. $42.4M (Chart 2, Bloomberg)
Despite mortgage rates being the lowest level in over a year, mortgage purchase applications FELL to the lowest level since the beginning of August.
OpenAI is now the world’s most valuable private company, valued at $500 billion. This is 3.5 times higher than Spotify’s, market value of $144 billion, and almost equal to Netflix’s.
Bonds continue to tell us risks are rising (Chart 3, @PPGMacro).
Current Drawdowns Bitcoin: -14.3% Gold: -8.4%
Largest Drawdowns Last 10 Years Bitcoin: -84%, -71% and -75% Gold: -21% (Bloomberg data).
Hhhmmmmm….. (Chart 4, LSEG Datastream, Nasdaq, MSCI, S&P, Schroders)
No key data today
Flat price is up in a sharp reversal from the scary downward momentum last week which took the price down to nearly $60. Bullish inventory in the US helped a great deal but the markets were running up ahead of the stats. And we have now bounced up $2.50 showing the bearish talk was a bit of nonsense and many players were overextended. Plus, $60 is an important psychological level where new buying tends to come in – it’s becoming a real level of support, following the similar bounce we saw at that point back in May
Europe’s getting big for its boots! The rumour that the EU is considering sanctioning Chinese state-owned companies is tearing through the Asian market like wildfire, as Chinese, Singaporean and Indian sources are all talking about it. If, as we’ve heard, PetroChina Hong Kong or another unit could be in the gunsights of the EU. Other state entities are not going to be hit, said a source close to one of the large state oil companies that has investments in the Middle East. It seems the EU is letting its Ukraine war frustrations out on a bunch of unrelated Chinese entities.
The Dec’25 Brent futures contract has traded in the $62/bbl handle this morning, from $62.23/bbl at 05:00 BST to $62.59/bbl at 07:45 BST. Prices eased further to $62.06/bbl at 11:00 BST (time of writing). In the news, Britain has issued a special licence granting businesses to work with two German-based subsidiaries of sanctioned Russian oil company, Rosneft; this license is valid until March 2026. In other news, the American Petroleum Institute has estimated that US crude inventories fell by 3mb in the week ending 17 Oct. In Norway, Aker BP has posted a slightly higher-than-expected core profit for Q3, increasing its 2025 output target from 400-420kb/d to 410-425kb/d. In India, Reuters has reported that the US and India are nearing a trade agreement that would cut US tariffs on Indian imports to 15-16%, down from 50%. The deal, according to India’s Mint, hinges on energy negotiations and may see a gradual scale back of Russian crude imports from India. Finalisation likely will be announced at the ASEAN Summit this month, according to Mint. Elsewhere, Serica Energy has announced that it will no longer be able to transition from the AIM market to the London Stock Exchange’s main market this year, citing regulatory complexities arising from its plans to purchase BP’s stake in North Sea assets. In the US, the Department of Energy has said that it is seeking to purchase 1mb of crude oil to be delivered to the Strategic Petroleum Reserve (capacity 700mb). According to Reuters, this is an effort to replenish the stockpile, which currently houses just nearly 409mb. Finally, at time of writing, the front-month Dec/Jan’26 and 6-month Dec/Jun’26 spreads are at $0.31/bbl and $0.28/bbl, respectively.
Financial market headlines may look healthy with S&P500 and Nasdaq back right to all-time highs but below the headlines liquidity is straining. Regional banks are down 20-30% in the last few weeks, buy-now-pay-later companies down 30-40% and tertiary crypto names also down -30-40%. This is why US 2’s, 10’s and 30-year bond yields are all trending lower, and on medium term cycle lows. In fact, the 30-year yield is now 60bp below May’s ‘sell US debt’ panic.
Other big news of course was the precious metal sell off, gold and silver down yesterday -5.3% and 7.3% respectively, golds biggest fall since 2013. Gold even fell to dead on $4,000 over night before bouncing (yesterday’s high $4,375). But the other key price everyone seems to be missing is the rally in the US dollar. (Chart 1, Bloomberg) The first nine months of 2025 was ‘SELL DOLLAR’ headlines, but now we’ve seen a clear double bottom, and are witnessing another squeeze of a crowded trade.
Bank of England Governor Andrew Bailey warned that the collapses of US firms First Brands and Tricolor could be “canaries in the coal mine” potentially signalling systemic risks…… but central banks have no Liquidity tools for private credit markets.
*TRUMP: AS OF NOV. 1, TARIFFS ON CHINA WILL BE ABOUT 155%
*TRUMP: HIGHER TARIFFS ON CHINA WON’T BE SUSTAINABLE FOR THEM
17:33 – *TRUMP: WILL SEE PRESIDENT XI IN TWO WEEKS IN SOUTH KOREA
17:52 – *TRUMP: MAYBE MEETING WON’T HAPPEN WITH XI
UBS WARNS: RECESSION PROBABILITY NOW AT A STAGGERING 93%
U.S. SERIOUS CREDIT CARD DELINQUENCIES (90+ DAYS UNPAID) SURGE TO HIGHEST LEVEL IN 14 YEARS
WAL 3Q PROVISION FOR CREDIT LOSSES $80.0M, EST. $42.4M
UK CPI unexpectedly stays at 3.8% (est 4.0%), OIS increases chance of a rate cuts with 60bp cuts now priced for the next 12 months.
More debt concerns, this time China whose debt continues to grow. Total debt-to-GDP has soared to a record 336% in Q2 2025 – the highest in its history.
To put things in perspective. Magnificent 7 market capitalization is bigger than the GDP of China. (Chart 2, @MichaelAArouet)
OpenAI is now the world’s most valuable private company, valued at $500 billion.
Prediction Markets Boom as Volumes Surpass 2024 Election – Bloomberg (Chart 3, @C_Barraud, Dune Analytics)
No key data today
After all the mania about surging oil on water and a mind-boggling jump in exports w/w last week, it seems there was “a bug”, according to Kpler, a BIG SCARY BUG according to The Officials. We have been telling our readers not to trust the published data. As recently as yesterday: “…as price war narratives mount and increasing paranoia about ‘oil exports vs imports’ with funky shipping numbers. Just remember, folks, don’t believe everything you read!”
M1 Brent futures trended down from $63.55/bbl on 14 Oct but failed to reach $60/bbl on 17-20 Oct. The contract then inched up to $61.30/bbl at the time of writing on 21 Oct. Still, the 10-day moving average (orange line) remains critical **short-term resistance**, with longer-term resistance at $66/bbl, where the 50-day moving average meets the resistance level from 08 Oct. **Support** lies at the psychological $60/bbl level, as seen this week. Past this, $56.00/bbl proved a fairly firm resistance in the sideways trading over Jan’21.
In this podcast, our Onyx Commodities Head of Trading Desks discuss the latest trends and developments in the oil, gas, power and carbon markets in which Onyx Commodities trades. This episode was recorded on Tuesday, 21 October 2025, at 11:30 a.m. London time. Please listen to the end of this podcast for important disclaimers.
This communication is for informational purposes only and based on the information available at the time the podcast was recorded. This is not an offer to buy or sell, nor a solicitation, and no recommendations are implied. It does not consider your financial circumstances or objectives and may not be suitable for you. Copyright 2025, Onyx Capital Group – all rights reserved.
This report aims to provide a position index for energy futures between -50 and 50, with 0 as the neutral position. The full methodology is at the back of the report. When the position index is at the extremes, above 40 or below -40, the market is overstretched relative to its average position in the previous 3-year rolling window. As such, it is ripe for mean reversion. Consequently, when the index is high, deleveraging will follow, having a negative impact on price, while when the index is low, we expect accumulation that will push the price higher.
Another week brings another selection of new trade ideas from Flux Insights. This week, we look at trades in Crude and Naphtha….
In the week ending 17 October 2025, exchange traded futures volumes were largely up w/w across most instruments. On a y/y basis, compared to the week ending 18 October 2024, exchange traded futures volumes increased across the front three tenors for Brent and gasoil.
The Dec’25 Brent futures contract has risen this morning, from $60.70/bbl at 08:00 BST to $61.52/bbl at 11:00 BST (time of writing). In the news, Japanese Trade Minister Yoji Muto has said that Japan will approach Russian energy imports based on its own national interest. Japan has agreed in line with other G7 nations to phase out Russian oil imports and claims to be consistently reducing its Russian dependence. In the Red Sea, Reuters has reported that a Cameroon-flagged LPG tanker has exploded off the coast of Yemen. The EU naval mission EUNAVFOR has confirmed the rescue of 24 of 26 crew members and claims that the explosion was ‘accidental in nature;’ however, investigations are still ongoing. Insurers have reportedly begun reassessing risk premiums for vessels looking to pass the Bab el-Mandeb as operators reconsider delays and diversions for upcoming energy shipments. In China, a Reuters report has said that crude oil stockpiles have taken a dive to roughly 570kb/d in September, down 1mb/d from August. Chinese crude imports dropped to 11.5mb/d in September, the lowest level seen since January 2025. In Norway, the Norwegian Offshore Directorate has reported that the country’s oil production has exceeded an official forecast by 5.4% y/y, while gas has fallen behind by 1.9% y/y. Finally, at time of writing, the front-month Dec/Jan’26 and 6-month Dec/Jun’26 spreads are at $0.16/bbl and -$0.06/bbl, respectively.
Flat price is rebounding. We told in yesterday’s European edition that the bearish narrative seemed overcooked. Too many bearish stories by so many and where is the extra physical oil? Yes, there is some by Saudi Arabia and that is it, the rest are producing the way they were so the extra marginal barrel is yes, there and weighing the market down but by the millions being reported. We just don’t see it.
In the week ending 14 Oct, Brent futures saw a drop in prices, reaching a high of $66.47/bbl on 08 Oct before seeing a low of $62.16/bbl on 14 Oct. Money managers reduced their long position for the fourth consecutive week, down 21 mb (−8%), while increasing their shorts for the third week by 10 mb (+8%).
