Brent Declines Despite Another Record Draw in US SPR

In the news, US Strategic Petroleum Reserve stocks fell to 285mb last week, the lowest level since November 1982, according to the Department of Energy. The drawdown is part of a US agreement to release 172mb from the nation’s reserves. Elsewhere, Exxon Mobil has taken its 264kb/d Joliet, Illinois refinery offline after a power outage, the company has reported. The outage hit around 3:30pm CT, with power restored by about 7pm, as per a company statement, triggering the refinery's safety flare and a shutdown. Exxon said it's assessing the refinery's status, with the cause still under investigation. The Joliet refinery, a key Midwest fuel supplier, has a capacity of around 11Mn gal/day of gasoline and diesel. In other news, high LNG prices are slowing Bangladesh's industrial growth, forcing electricity outages and squeezing spending on development projects as government gas subsidies climb, the country's power minister stated. Bangladesh gets more than 40% of its electricity from imported LNG. "Industrial growth is slowing down, and production is going down," Power Minister Iqbal Hasan Mahmud said at the Gastech conference. "It is having a big effect." As LNG prices rise, so do the subsidies the government provides to gas consumers, he added, "and that is affecting our budgetary provisions for the other development programs." Finally, as of the time of writing, the front-month (Nov/Dec) and 6-month (Nov/May) Brent futures spreads are at $5.33/bbl and $21.27/bbl, respectively.

This afternoon in Dated we saw very strong buying pre-window with Oct'26 DFL trading up to $10.44/bbl with many cargo bids in the physical. Pre-window we saw buying of 9-15 Oct vs Cal Oct'26 at $1.60/bbl and Cal Oct'26 vs 14-20 Oct at $1.10/bbl. We also saw strong buying of 28-2 Oct vs Cal Oct'26, whilst there was a size seller of 1-15 Oct vs 16-30 Oct at $7.90/bbl. In the physical window we saw trades and majors bidding across grades and pushing the physical diff up over $2. In the paper window we saw trades and majors buying 28-2 Oct'26 CFD and 5-9 Oct'26 CFD although market makers did hit down. Post window market eased with Oct'26 DFL trading back down to $9.40/bbl.

This afternoon in Brent/Dubai we traded lower on thin liquidity, the Oct Brent/Dubai trading down from -$0.60/bbl to -$1.81/bbl. We saw selling by Chinese in Nov Brent/Dubai, but otherwise the move lower was all on screen. There was major selling Oct/Nov Dubai, tradehouse buying and selling the Oct/Nov box. The boxes all traded lower, as Brent flat price moved lower but the Dubai spreads remained well bid on screen. There was more refiner buying of Oct/Nov/Dec Dubai fly around $2.35/bbl. Banks continued to sell backend Brent/Dubai, Q1 through to Q4 2027 Brent/Dubai well offered throughout the afternoon.

In VLSFO, Sing 0.5 spreads saw real buying this afternoon, with Oct/Nov getting bid up from $46.00/mt to $50.50/mt, Nov/Dec gained 2 dollars to $40.00/mt. Oct Sing crack was getting consistently bid up on screen finding resistance at $22.95/bbl and then getting offered down to $22.40/bbl during the window, this sell side pressure continued post window trading down to $22.05/bbl. Once again Euro spreads did not see massive volume traded, Oct/Nov traded a dollar lower to $18.50/bbl. Oct crack saw better volume traded and was offered down from $2.40/bbl to $1.35/bbl, 0.5 E/W traded 10 dollars higher up to $132.50/mt.

In HSFO, 380 spreads price action was somewhat muted this afternoon, Oct/Nov was choppy trading between $39.00/mt and $41.00/mt, Nov/Dec behaved similarly trading between $28.00/mt and $29.00/mt. Oct 380 crack was rangebound this afternoon trading between -$2.05/bbl and -$1.80/bbl. Barge spreads were thin this afternoon, Oct/Nov traded down from $20.00/mt to $18.50/mt on limited liquidity. Oct Barge crack also sold off, encountering real selling from -$13.30/bbl down to -$14.00/bbl where it last traded.

This afternoon in distillates, Sing gasoil spreads saw selling into Dec, with Nov/Dec hit from 10 down to $9.00/bbl on screen. Front E/W firmed, with Oct trading from -$68/mt up to -$60/mt, while Jan traded up to -$70/mt. Regrade traded lower, with Dec hit from $4.50/bbl down to $4.25/bbl, while Nov/Dec regrade roll was offered at -$2.75/bbl.

Prompt ICE gasoil spreads sold off, with Oct/Nov from $92 /mtdown to $82.50/mt, while Nov cracks moved from $84/mt down to $80/mt. European jet diffs also weakened, with Oct trading from $140/mt down to $120/mt last.

This afternoon gasoline weakened overall, especially post Russia-Ukraine headlines. RBBRs sold off from $27.50/bbl to $25.40/bbl, with arbs coming off from -8.00c/gal to -10.00c/gal. EBOB cracks traded up to highs of $37.40/bbl but came off to $35.25/bbl on the news. Spreads also got sold into, as Oct/Nov'26 fell from $118.00/mt to $110.50/mt. E/W was weak for most of the afternoon and saw selling down to -$9.75/bbl before getting bid up to -$8.00/bbl as EBOB weakened.

This afternoon in naphtha was weak, with MOC better offered and a sharp move lower in crude dumping spreads through the window. NWE naphtha came under pressure from the morning, with Oct'26 cracks moving down to -$4.80/bbl pre-window before gapping down to -$5.75/bbl and recovering slightly to -$5.60/bbl , while Q1'27 moved from -$4.65/bbl to around -$5.20/bbl and Cal 27 was at -$8.70/bbl; spreads softened as well, with Oct/Nov'26 falling from $41.00/mt this morning to $34.50/mt, while Mar/May'27 27 traded at $42.00/mt. E/W was supported pre-window, with Oct'26 holding around $65.50/mt versus $65.00/mt this morning, before gapping lower on the crude move, trading down to $58.00/mt and rebidding to $60.00/mt, while Cal E/W was around $38.50/mt and the Oct/Nov'26 box came off to $0.50/mt. MOPJ weakened too with mostly flat-price trading from petchems, with Oct'26 cracks down from $3.20/bbl this morning to $2.65/bbl pre-window before trading at $1.05/bbl post-window, Q4'26 around $1.55/bbl and backend cracks better offered; spreads were illiquid but came lower, with Nov/Dec'26 down from $41.00/mt this morning to around $40.50/mt pre-window and flat price trading in line with Oct/Nov'26 near $34.50/mt.

This afternoon in NGLs, FEI was strong in the front, and as a result spreads were trading higher and LST/FEI sold off aggressively. Oct/Nov'26 FEI was bid up to a trading level of $40.50/mt, compared to $37.50/mt this morning, and Nov/Dec'26 was trading $3.50/mt higher than earlier at $36.50/mt. There was also spread interest in the deferred, with Mar/Apr'27 27 lifted at $39.50/mt and Apr/May'27 27 was trading at $33.50/mt. As FEI was stronger across the afternoon, Oct'26 LST/FEI traded down to -$435.00/mt, compared to its trading level of -$414.00/mt at the end of the morning. There was also some Cal 27 LST/FEI buying at -$233.00/mt, that eventually closed the afternoon at -$228.00/mt. LST had some mixed interest in the deferred, seeing Q1/2 27 sold at 6.00c/gal, and Q426 /Q2'27 was getting sold at 8.875c/gal. Oct'26 LST flat price better offered at open and traded down across the afternoon finding support at 85.00c/gal. In butane, it was a quieter afternoon on the whole but front C4 ENT flat price was strong. C4/C3 LST buying out of Nov'26 at 48.75c/gal, and Q1'27 was lifted at 41.50c/gal, compared to last week’s closing level of 37.50c/gal.