Brent Eases, Qatar to Resume Normal LNG Production

In the news, Oman has confirmed it will keep the Strait of Hormuz open to shipping without charging transit tolls, while introducing two temporary north and south lanes alongside the main route to improve safe passage for vessels exiting the region. Working with the IMO, it has set up these corridors amid elevated security risks. In Qatar, Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani said the country expects to resume normal LNG production within a few weeks, following the suspension of LNG production on 28 Feb due to a drone attack on the Ras Laffan complex. He added that establishing a direct hotline between the US and Iran is essential for the full reopening of the Strait of Hormuz. Elsewhere, Russia’s oil companies may soon be required to retain at least 30% of their crude production for domestic refining, according to Kommersant. The proposal was outlined in a letter sent by Rosneft CEO Igor Sechin to President Putin in late May, as escalating Ukrainian attacks on Russian energy infrastructure continue to disrupt refinery operations and tighten domestic fuel supplies. Putin has reportedly instructed Deputy Prime Minister Alexander Novak to review the proposal and assess next steps. In other news, three stranded VLCCs transited the Strait of Hormuz on 23 Jun, while seven empty Qatar-linked LNG carriers have entered the region in recent weeks, signalling a gradual resumption of Gulf flows. Iranian-linked tankers also continued crossing the waterway as US-Iran negotiations progressed. More stranded crude cargoes are expected to leave the Gulf in the coming weeks, while sanctioned tankers have increasingly returned following the US sanctions waiver. According to President Trump, 19mb of oil passed through the Strait on Monday alone, though this value has not been verified. Finally, at the time of writing, the front-month (Aug/Sep) and 6-month (Aug/Feb) Brent futures spreads are at $0.13/bbl and $1.90/bbl, respectively.

This morning in Brent/Dubai we had a very weak phys window, during which we saw the Brent/Dubai break to the upside. The Jul Brent/Dubai traded up from $7.35/bbl to $7.70/bbl. There was trade selling of Oct and Sep EFS which meant the front Brent/Dubai boxes all rallied, the Jul/Aug, Aug/Sep and Sep/Oct up from $1.30/bbl, $1.30/bbl and $0.77/bbl to $1.45/bbl, $1.50/bbl and $1/bbl respectively. There was more buying of Cal'27 Brent/Dubai which traded $1.70/bbl, left bid on. The Dubai spreads traded lower, but there was paper on both the buy and sellside of Jul/Aug Dubai. The Jul/Aug traded down from -$1/bbl to -$1.10/bbl. The Aug/Sep had an easier time moving lower, with the Jul/Aug/Sep dub fly up from -$0.05/bbl to $0.05/bbl.

Selling came in on VLSFO to start. The spreads being offered were the catalyst to the weakness we have seen in the complex this morning. Jul/Aug began the morning offered at $22.00/mt before trading down to $20.00/mt. This resulted in the crack in the front drifting off, with an axed player on screen post window seeing the Jul Sing crack finish the morning off at $13.70/bbl. 0.5 E/W was bid to start the morning however the buying got taken out and some aggressive selling on Aug and Sep 0.5 E/W came into the market resulting in Euro 0.5 being supported. The Euro crack traded a touch higher from last night's close of $7.60/bbl to $8.00/bbl. Euro spreads closer to the front were largely unspoken, Jul/Aug Euro was implied a tough higher to $25.25/mt.

Conversely, 380 was supported to start the day, the crack was bid up on screen to -$7.50/bbl, from last night's close of -$8.30/bbl. 380 spreads were better bid however buying was not very aggressive, briefly seeing Jul/Aug touch $0.00/mt. The spread did then trade back to overnight levels of -$0.25/mt. 380 E/W was implied a touch higher due 380 strength with Jul trading up to $3.75/mt. Barges was fairly illiquid with barge crack stronger off the back of 380, closing the morning around -$8.00/bbl. Jul/Aug barges was trading in very small size between $1.25/mt and $1.50/mt.

This morning in distillates, Sing gasoil spreads were sellside in Aug/Dec for decent size with buying in Jul/Dec. E/W sold off initially from -$34/mt to -$36/mt in Jul where it then traded for the rest of the morning until coming off to -$39/mt post window. Regrade opened weaker and then had mixed interest in jul, trading at -$0.85/bbl for most of the morning. In Q4 we saw combo selling interest with nothing trading. Kero spreads were generally sellside in Jul/Aug and Aug/Oct but remained relatively stable at $1.07/bbl in the front.

Prompt ICE gasoil was slightly weaker through the window, dropping from $16.75/mt to $16/mt before rallying post window to $19.25/mt. Aug cracks saw similar flow rising from $40.50/bbl to $41.50/bbl on the ICE gasoil move. European jet diffs have seen continued weakness, trading down to $58/mt in Jul. Heating oil spreads softened while the M1 HOGO swap peaked post window at 31.5c/gal then came off to 30.8c/gal.

This morning in gasoline, Sing 92 flat price traded end window at $98.30/bbl with MOC offered. Cracks weakened in the East, with Jul trading down from $19.50/bbl to $18.70/bbl as 92/MOPJs were offerside. Jul/Aug got sold down from $4.55/bbl to $4.05/bbl as July E/W came off from -$9.30/bbl to -$9.80/bbl. EBOB was better supported as July cracks traded around $28.50/bbl in July and Sep had good buyside interest at $20.80/bbl. Spreads saw mixed interest as Jul/Aug remained balanced around $26/mt.

This morning in naphtha, July MOC better offered with Aug MOPJ MOC better bid, seeing July trade -5c with Augy getting lifted +5c. Refiners buyside of Aug/Sep MOPJ this morning, but we see prompt spreads sell off with flies also selling off. July/Aug/Sep MOPJ fly sees real selling down from 75c to flat this morning, which saw value at $1/mt yesterday. E/W was weaker, with July E/W trading down to $29.50/mt. In Europe, prompt crack weakens to -$6/bbl post window with the Cal crack trading -$9.05/bbl.

This morning in NGLs, there was some early FEI flat price buying out of Aug at $544/mt. Jul FEI/CP opened trading at -$28/mt, down from yesterday’s closing level of -$23.50/mt. Across the morning, as July CP flat price stepped up to trade up to $590/mt, FEI/CP weakened to print at -$30/mt before settling at -$29/mt end window. Jul LST/FEI traded at -$190/mt before strengthening to -$188/mt by the end of the morning. There was also interest in the Cal'27 FEI/MOPJ which was hit at -$68/mt before being re-offered at -$65/mt. Prompt FEI spreads opened a touch stronger today, with Jul/Aug trading at $6.50/mt, up from $5/mt at close last night. End window on screen, Jul FEI flat price was hit at $560.50/mt.

Now close to 40% chance Fed hikes 25bp at the next meeting on 29th July. S&P closes down 1.4% and Nasdaq down 3.3%, notably both closing on the lows, very weak. Kospi falls 10% yesterday with a marginal 1.4% bounce today. The dollar continues to surge with EURUSD breaking key support, while silver finds support at previous lows.

Goldman Sachs trimming its 12-month US recession call to 15% from 25%, back at its long-term average.

US S&P composite PMI data (Manufacturing & services) beats estimates to 52.2 from 51.5 last, while Germany weakens composite 48 (contraction) vs 48.8 prior, UK falls to 49.4 from 49.7.

Micron earnings today. The stock is now worth over $1.2 trillion and driving a broader momentum-based rally that is largely dependent on sentiment around Micron's stock.

Hedge fund net short bets on Brent crude oil are up to ~$18 billion, the highest in at least 10 years. Seems extreme with Brent just $2.5 dollars away from Feb 27th levels. (Goldman Sachs)

The Trump administration has announced $17.5 billion in conditional federal loans to fund 10 new large-scale nuclear reactors - one of the largest U.S. nuclear expansion initiatives in decades - with the goal of quadrupling domestic nuclear capacity by 2050, powering AI and data centres, and reducing dependence on foreign energy technology.

Here are the five stocks positioned to benefit:

$CCJ - Cameco. Owns nearly half of the private company building all 10 reactors, and supplies the uranium to fuel them.

$BAM - Brookfield. Owns the other half of that same company.

$BWXT - BWX Technologies. Manufactures the reactor components inside each plant.

$CW - Curtiss-Wright. Makes the pumps and valves that keep reactors operating safely.

$LEU - Centrus Energy. The only U.S. company enriching uranium domestically

$GOOGL replacing $VZ in the Dow. Google is joining Amazon, Apple, Microsoft, and Nvidia as the fifth Mag 7 name in the Dow Jones Industrial Average - a index that increasingly reads like a mega-cap tech portfolio.

U.S. housing showing signs of life. Home prices rose 0.3% MoM in May - the fastest monthly gain since January - and 2.5% YoY, the strongest annual growth in six months, per Redfin. The move reflects deals signed in April when mortgage rates dipped and demand responded, with closed sales hitting their highest level since 2022.