They don’t like to be predictable! The Saudis kept November OSPs for Extra Light and Light to Asia flat from October, at the average of Dubai and Oman +$2.50 and +$2.20, respectively. Medium and Heavy were each cut by 30c.
The Dec’25 Brent futures contract gapped up by roughly $1 from Friday’s close ($64.37/bbl), trading within the 60c range between $64.35/bbl and $65.63/bbl before rising to $65.65/bbl at 10:40 BST (time of writing). In the news, OPEC+ has announced a modest 137kb/d output increase to be implemented in November. Reuters reported tensions between Russia and Saudi Arabia as the former pushed for modest increases while the latter lobbied for a more aggressive hike. In other news, the Russia defence ministry has claimed to have destroyed 251 Ukrainian drones overnight on Sunday. A fire was reported by RBK-Ukraine media at an oil depot in Fedosia on the Crimean coast, where a fuel tank exploded as a result of the attack; Reuters has been unable to independently verify these claims. Elsewhere, the National Oil Corporation of Libya has said that Italy’s Eni has begun drilling operations offshore after a 5-year break due to the COVID-19 pandemic. Further, a senior company executive of India’s Sahara Group has been cited saying that the conglomerate plans to be producing 350kb/d of crude oil daily in Africa by 2030. Finally, at time of writing, the front-month Dec/Jan’26 and 6-month Dec/Jun’26 spreads are at $0.45/bbl and $0.90 bbl, respectively.
More stimulus!!!…. Sanae Takaichi is the new Japanese Prime Minister, Japan’s first-ever female leader and she’s coming in swinging with huge stimulus plans. The Nikkei surges 4.75%, Yen falls -1.8% and the Yen curve steepens aggressively with 2-year yields down 4bp while 30-year rallies 13bp. Precious metals love stimulus too with gold and silver both 1% higher, new all-time highs for gold and silver homing in on $50. Bitcoin also makes new record highs touching $125.7k and the US dollar also rallies another 0.5% and seems to be trending higher having bottomed at 93.30.
With no payrolls data on Friday the Goldman Sachs big data payroll tracker shows a rebound for September. Goldman: “Our updated job growth tracker which combines the signal from still-available Big Data measures of job growth, measures of layoffs, and surveys of households and businesses, rebounded to 80k/month in September after falling to a trough around 0k in April and May.” (Chart 1, Goldman Sachs)
Data this week:
1. NY Fed Inflation Expectations data – Tuesday
2. Fed Meeting Minutes – Wednesday
3. Fed Chair Powell Speaks – Thursday
4. MI Consumer Sentiment data – Friday
5. MI Consumer Expectations data – Friday
OPEC needs to be careful this weekend, as its positioning at the meeting could easily spook a market already nervous about being long and a coming price war. Be prepared in case of a misjudgement and the loud sound of a toilet flushing on Monday morning as flat price plunges. Who could add 500 kb/d anyway? We’re scratching our heads trying to figure it out; most members are flat out already! Only KSA has any real spare capacity – it’s not OPEC, it’s Saudi!
This report reviews weekly oil inventory data from the US EIA’s Weekly Petroleum Status Report, Global Insights’ ARA Independent Storage and International Enterprise’s Singapore product storage
Does it want $65 or not? Brent bounced back off the $64 level and briefly looked like it wanted to get above $65 again at 10:00 BST, before dropping back. Was the bearishness flushed away yesterday? Well, Brent is stronger than it was at the end of yesterday’s trading, but still looks rather deflated. Spreads and flat price are going funky – read about the impact of the El Segundo fire on the next page!
The Dec’25 Brent futures contract rallied this morning before retreating, from $64.36/bbl at 02:00 BST to $64.73/bbl at 07:00 BST and down to $64.40/bbl at 11:00 BST (time of writing). In the news, a large fire was reported at Chevron’s 290kb/d El Segundo refinery Thursday night. Allison Cook, a spokesperson for Chevron, said that no injuries were reported. Local media has contained the fire, though it is not yet clear what caused the explosion in the first place. Elsewhere, Poland has announced that its plans to link with a NATO pipeline network will cost roughly $5.5bn, with the ministry and Polish pipeline operator (PERN) signing a preliminary deal to extend the country’s fuel pipelines. In other news, an Iraqi government official has been quoted saying that Iraq could increase its crude oil exports by roughly 250kb/d, as its local consumption redirects its demand to solar power projects. In the US, an anonymous official told Bloomberg that the Trump administration is working towards keeping Kurdistan oil exports flowing to Turkey. The administration hopes to push these export flows to support both the Iraqi economy and US companies operating in Iraq. Finally, at time of writing, the front-month Dec/Jan’26 and 6-month Dec/Jun’26 spreads are at $0.32/bbl and $0.66/bbl respectively.
Morning Macro 3rd October
S&P 500 and Nasdaq make new all-time highs with Bitcoin also up +5.7% in 2 days. Meanwhile on the data front weekly jobless claims and factory orders data were postponed and there’s no U.S. payroll data today because of the shutdown.
OIS prices 98% chance of a Fed rate cut at 29th October meeting.
CME to offer 24/7 crypto futures and options trading in 2026
While ADP payrolls data was weak on Wednesday, layoffs on the other hand were weak yesterday, it’s a no hiring no firing economy. Layoffs announcements have decelerated back to rates seen in 2024. (Chart 1, Bloomberg)
Key Economic Data Suspended During Govt Shutdown:
1. Jobless claims (Labor Department)
2. Nonfarm payrolls (BLS)
3. Consumer Price Index and Producer Price Index (BLS)
4. Retail sales, factory orders, housing starts, trade data (Census/BEA)
5. Employment Trends Index (Conference Board)
6. GDP data (BEA)
7. New home sales and construction permits (Census Bureau)
8. Export and import trade data (Census/Commerce)
Data today – EZ & UK services PMIs
Price war? It certainly feels like the market is being put through the ringer today. Brent dropped to under $65 and struggled to get it back up, wobbling around as though dazed into the early afternoon. Pre-window, however, it dropped to the mid-$64 range – its lowest in months! And then it kept going, now flirting with the $63 handle at the time of writing. The flat and even contango spreads are gradually creeping forward, as now the Apr/May spread is slipping into a few cents of contango. While China’s away, the bears come out to play!
This week in Brent, we anticipate money managers and other reportable players to trim their length. In gasoil futures, we expect producer/merchants to add to both their long and short positions. In contrast, we anticipate producer/merchants to exit their positions in RBOB futures with added length by money managers. Overall, we expect a risk-on week for players in gasoil, but a risk-off week in Brent and RBOB.
The bears are on the rampage! The $65-70 range looked impenetrable for a long time as an assault on the lower bound was repulsed before 10:30 BST. But a rapid-fire go again had us down to the $64 range minutes later. Nothing lasts, though, and it was quickly back above $65. But it’s really all about Dubai, whichever metric you choose; flat price, time spreads, Brent/Dubai… It’s getting soft in the PG. The MidEastern market has gone from super hot to not even lukewarm. Slam down.
The Dec’25 Brent Futures contract fell this morning, from $65.76/bbl at 03:00 BST to $65.00/bbl at 10:45 BST (time of writing). In the news, an official from the Indonesian state energy firm Pertamina (PERTM.UL) reported no supply disruptions following a fire at its Dumai refinery. Gasoline supplies for northern Sumatra were not affected. Elsewhere, the US has confirmed that they will provide Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure, reports Reuters. This will make it easier for Ukraine to target Russian refineries, pipelines, and other infrastructure. In other news, the Trump administration is also set to keep oil and gas permitting unhindered, despite the government shutdown. Bloomberg reported that the volume of unsold Middle Eastern oil in November is estimated between 6mb/d and 12mb/d with sellers including the United Arab Emirates and Qatar. Finally, at time of writing, the front-month Dec/Jan’26 and 6-month Dec/Jun’26 spreads are at $0.28/bbl and $0.61/bbl respectively.
U.S. yields fell sharply (2-year -8bp) on the weak ADP employment numbers which suddenly become significant as there will be no payroll data this Friday due to the government shutdown. This also sent S&P500, the Nasdaq, gold, FTSE 100 and Nvidia amongst others to yet more new all-time highs. The 2-year yield is now targeting a key 3.45% support line, a break below here will see an aggressive acceleration lower in price action, and will be signalling a dramatically weaker economy. (Chart 1, Trading View)
ADP payrolls for September: -32k Largest decline since March 2023 (Chart 2, Bloomberg, ADP)
US ISM manufacturing PMI remains in slight contraction 49.1 (est 49.0, last 68.7), while prices fell to 61.9 (last 63.7)
The first ratings agency takes notice…. S&P: THE U.S. GOVERNMENT SHUTDOWN ADDS UNCERTAINTY TO THE ECONOMIC OUTLOOK
White House says “mass layoffs” are imminent
The Argentine peso fell another 6% yesterday. The crisis of confidence stems from a poor showing of Milei’s party in a key local election last month.
The power needs of massive AI data complexes are rapidly driving up electricity bills — piling onto the rising prices for food, housing and other essentials already straining consumers. That’s starting to have economic and political reverberations across the country as utilities and local officials wrestle over how to divvy up the costs of data centres. According to a Bloomberg News analysis, wholesale electricity now costs as much as 267% more for a single month than it did five years ago in areas located near significant data centre activity. (Chart 3, Bloomberg)
G7 nations say they will target those continuing to increase Russian oil purchases
Japan September consumer confidence index 35.3 vs 34.9 prior
Data today – EZ unemployment rate, US initial jobless claims
The oil market seems to be bottoming out after almost kissing the 65 dollar mark. You just can’t stop some people, especially raging bears, as Mercuria returned to offer. We thought their Dubai antics would have tired them out, but no! For another session, Merc offered Midland, a 23-27 Oct cargo at Dated +$2, while BP has flipped from its buyside activity to offering Midland: for 18-22 Oct and 23-27 Oct, as well as 28-30 Oct Ekofisk.
This report reviews the key data from the US EIA’s Weekly Petroleum Status Report
