Brent Down as QatarEnergy Extends Force Majeure

The current M1 (Sep'26) contract is currently printing at $86.12/bbl. In the news, QatarEnergy has extended force majeure on LNG deliveries to Italy's Edison until the end of September, with three additional cargoes affected. This brings the total number of impacted cargoes to 24, equivalent to around 3Bcm of gas. Edison said it has secured alternative supplies and continues to meet all customer commitments, having already replaced 17 cargoes (around 1.6Bcm) through the Adriatic LNG terminal. Elsewhere, Italy has reintroduced a temporary cut to diesel excise duties as surging energy prices continue to pressure households and businesses. The measure will reduce diesel prices by €0.17/L until 06 Aug and is expected to cost the government around €125m, including separate support for truck drivers and farmers. Finance Minister Giancarlo Giorgetti said additional measures to reduce electricity and gas bills could be announced on 04 August if needed. In Australia, the nation is considering building its first new oil refinery in more than 60 years as the Middle East conflict highlights the country's reliance on imported fuel. Prime Minister Anthony Albanese said the government and Western Australia will jointly fund a A$4m feasibility study for a proposed Perdaman refinery, aimed at strengthening domestic fuel security. Australia currently imports around 80% of its fuel needs. In other news, Kyrgyzstan is in talks with Russia over fuel supplies as Ukrainian drone strikes continue to disrupt Russian refinery operations and reduce petroleum exports. The country, which sources more than 90% of its gasoline from Russia, has already imposed an indefinite fuel export ban and signed supply agreements with Belarus and China, while also seeking additional shipments from neighbouring countries to ease shortages. Finally, as of the time of writing, the front-month (Oct/Nov) and 6-month (Oct/Apr’27) Brent futures spreads are at $2.01/bbl and $7.40/bbl, respectively.

A choppy morning in Brent/Dubai, initially selling off with more selling in Aug Dated/Dubai, but then a weaker window saw us rally in the Brent/Dubai. Aug Brent/Dubai rallied from $7.30/bbl to $7.80/bbl, before selling back off after the window following more Chinese Dated/Dubai selling. The Aug Brent/Dubai sold off to around $7/bbl, tradehouse selling at $7.10/bbl. All spreads were well bid, Aug though Jan Dubai. This saw the Brent/Dubai boxes move lower, Aug/Sep box down from $1/bbl to $0.40/bbl. There was bank selling of the quarterly Brent/Dubais, Q4'2026 , Q1 and Q2'2027.

Quieter morning in Dated. Opened up better offered and saw Aing selling Aug Dated/Dubai pushing down the Aug DFL before some support was found, and Aug DFL traded back up to $1.82/bbl and Sep DFL to $2.00/bbl. We saw selling 1-7 Sep vs Cal Sep at $0.70/bbl and sell-side interest in 7-11 Sep vs Cal Sep. In the front we saw 29 Jul vs 05 Aug trade low at $0.05/bbl and saw some buy-side interest in Cal Aug vs 24-28 Aug.

A weaker morning on VLSFO. Cracks went better offered in the window and this trend continued post window. The Sing crack traded down to $20.35/bbl from overnight levels of $21.40/bbl. On weaker cracks and lower crude saw spreads also come off with Aug/Sep Sing trading as low as $39.00/mt from last night's close of $41.00/mt. Euro was fairly illiquid this morning. Both spreads and cracks came off due to Sing weakness. The Euro crack traded down a touch to $8.10/bbl while Aug/Sep Euro was implied down to $28.00/mt.

A stronger morning on HSFO. 380 cracks were bid off the bat this morning. Aug 380 crack traded up to -$2.60/bbl from -$4.00/bbl. 380 spreads enjoyed support from crack buying, Aug/Sep traded up to $18.75/mt. Likewise, the 380 E/W traded up this morning, with Aug 380 E/W buying up to $41.25/mt. Barges remained fairly rangebound. The barge crack traded between -$9.20/bbl and -$9.10/bbl while Aug/Sep barges was implied around $9.00/mt.

This morning in distillates, Sing gasoil spreads saw selling initially before buying post window, Aug/Sep trading from $8.05/bbl down to $7.90/bl, then up to $8.60/bbl lifted on screen. E/W also saw selling early on, trading from -$55/mt down to -$63/mt, before firming back to -$58/mt. Kero spreads saw buying in Aug/Oct, supporting prompt regrade up to -$2.50/bbl.

ICE gasoil spreads opened higher and rallied, with Sep/Dec trading from $170/mt up to $191.25/mt, while the Sep crack rallied to $70.50/bbl. European jet diffs weakened into Q4, with Sep down to $110/mt. Heating oil spreads firmed while HOGOs sold off, Aug HOGO swap now down to 23.4c/gal.

Gasoline was mixed this morning, as we saw strength in the West and weakness in the East. 92 cracks came off from $27/bbl to $26.25/bbl before recovering during the window, and spreads were better offered, with Aug/Sep getting sold down from $7.10/bbl to $6.85/bbl. E/W weakened significantly, with Aug trading down from -$10.25/bbl to -$12/bbl as EBOB went bid. EBOB cracks were very strong, with Aug rallying from $37.50/bbl to $38.50/bbl and Q1 was valued at $13.40/bbl. Spreads saw a significant move up as well, with Aug/Sep getting bid up from $70/mt to $76/mt.

This morning in naphtha, MOC better offered with -5c getting sold in Aug MOPJ MOC. Aug/Sep MOPJ crack roll better offered this morning with selling stepping down from $3.05/bbl to $2.80/bbl on the crack roll basis, bouncing back slightly into end of window. Aug Europe crack trades down to -$0.90/bbl this morning but bounces back to -$0.60/bbl post-window, with Q1 naphtha crack trading -$7.40/bbl in the morning and then getting hit -$7.50/bbl.

This morning in NGLs, there was some early FEI flat price buying out of Nov at $625/mt. Oct/Nov FEI opened getting lifted at $10/mt, the same level as last night’s close. Aug/Sep FEI traded up from $35/mt to $37/mt, and Sep/Oct closed the morning trading at $24/mt, having opened at $21/mt, $2 weaker than yesterday’s close. There was Aug/Sep CP spread selling at $35/mt, and the Sep C3/C4 CP traded at -$19/mt. End window there was a buyer of Sep C4 ENT/MOPJ at -$275/mt, with it settling -$280/mt end window. At the close on screen, Aug FEI flat price was hit at $686/mt.

The Fed, Semiconductors, and the Dollar Just Sent the Same Warning - Are You Listening?

Five signals hit at once today. They're not five separate stories - they're one story: a hawkish Fed surprise is colliding with an already-fragile risk-asset structure, and liquidity is tightening everywhere at once.

1. A 36% Chance Nobody's Pricing For
Citadel Securities reportedly expects Fed Chair Kevin Warsh and the Federal Reserve to hike 25bps Wednesday - per Bloomberg. OIS prices just a 36% probability. The Fed hasn't moved against market pricing since March 2020. It would do so as 1-year inflation swaps print below 2%. If Citadel is right, this ranks among the more consequential surprises in years.

2. China's Chip Breakthrough Meets a Nvidia Financing Scare - and Asia Pays the Price
Two shocks landing together:

- China's DUV breakthrough threatens South Korea's memory chip moat

- A US semiconductor selloff - driven by fresh questions on Nvidia's financing structure - spilled into Asia. Nvidia just announced $500B into SK Hynix and $250B into OpenAI

Samsung and SK Hynix are down 12-14%. The damage shows up in the index: KOSPI -11% today, -36% off its June high. Sandisk fell -11% yesterday, -46% off its June 22 record. Nikkei -4% this morning. Nasdaq futures -0.9%, finally breaking support.

Remember silver. Markets move faster than positioning allows for.

3. The Line in the Sand for Bonds
US 30-year yield is holding - for now. A break above 5.20% risks a genuine bond market panic.

4. A Dollar Breakout Nobody's Talking About
Oil and US yields are falling, yet the dollar is pushing toward a breakout above 102 on DXY. EURUSD looks especially vulnerable. A stronger dollar into a risk-off unwind is exactly the kind of liquidity squeeze that turns a selloff into a panic.

5. The Backdrop: Sentiment, Access, and Gold
Consumer sentiment has rarely been this weak against such a benign economic backdrop. Meanwhile, Revolut will give European customers access to private equity, credit, and infrastructure funds - a sign retail is being pulled further into illiquid assets just as liquidity gets scarcer. And for the first time in years, global fund managers think gold is undervalued.

Five markets, one signal: liquidity is the trade now, not direction. Everything else is noise until that breaks. Manage risk.