Brent falls $1.65 to $105.35/bbl despite continued tanker strikes

US President Donald Trump criticised Yemen’s Houthis for “misbehaving very badly” following attacks on Saudi airports, including Riyadh’s King Khalid International and Dammam’s King Fahd International. Saudi Arabia extended the suspension of King Khalid airport operations until Saturday after repeated attacks killed at least 18 people. UK Prime Minister Andy Burnham said a suspected plot targeting RAF Fairford was “almost certainly” directed by Iran’s IRGC, despite Tehran’s denial. Meanwhile, the Wall Street Journal reported Iran warned of possible ground incursions into neighbouring countries if the US war resumes. Strait of Hormuz strikes continued rapidly, with six tanker strikes confirmed by UKMTO yesterday. Japan-linked oil tankers are resuming Middle East pickups, with more Japanese-controlled VLCCs expected to collect cargoes from Fujairah in the coming days. Finally, the Dec/Jan’27 and Dec/Jun’27 Brent futures spreads are at $3.18/bbl and $12.25/bbl, respectively.

Softer morning in Dated, led by Brent Dec/Jan, which sold off 31c to $3.12/bbl. Nov DFL came under pressure, with real names selling it down from $5.55/bbl to $5.20/bbl. The Nov/Dec DFL roll followed it lower to $1.52/bbl. Dec DFL saw buyside interest between $3.90/bbl and $3.85/bbl, and balmo Oct DFL was bid at $16.00/bbl. In prompt structure, the selling was mostly in rolls: 26-30 Oct v 16-20 Nov traded $6.95/bbl, 6-9 Nov v 13-16 Nov $2.25/bbl and Cal Nov v 17-23 Nov $1.60/bbl. 12-18 Nov v Cal Nov was the exception, with buying at -$0.55/bbl. The CFD curve eased, with the week of 19 Oct at $15.55/bbl (-75c on the day) and the following week at $7.40/bbl. On screen, Dec Brent softened to $104.61/bbl and Nov Dated to $106.62/bbl. Further down the curve, Q1 DFL saw selling at $2.30/bbl.

This morning in Brent/Dubai, there was large products buying of Q1 and Q2'27. This in combination with Dubai spreads being better offered on screen, boxes being bid by trade house, meant that the whole curve rallied. The Nov Brent/Dubai rallied up from -$2.65/bbl to -$2.07/bbl. We saw Chinese selling of cross months, Jan Brent vs Nov Dubai, which was the liquidity market makers used to offer out the backend quarterlies.

This morning in distillates, Sing gasoil spreads were well bid, with Dec/Aug'27 trading from $28.75/bbl up to $30.15/bbl. Front E/W traded range-bound between -$126.00/mt and -$129.00/mt, as Q2'27 E/W got hit down to -$78.00/mt. Regrade was better bid in the front, Nov'26 from $1.95/bbl to $2.10/bbl, while Q1'27 was bid up to $3.10/bbl. Prompt ICE gasoil spreads firmed overall, Nov/Dec'26 trading from $37.00/mt up to $39.00/mt, while Dec'26 cracks rallied from $76.00/bbl up to $77.38/bbl.

This morning 92 MOC was balanced. The east opened up bid with spreads getting lifted; Nov/Dec got paid up to $7/bbl before getting sold down during the window. Nov cracks opened at $23.40/bbl but weakened to $22.50/bbl, but Nov E/W got bid up from -$6.10/bbl to -$5.10/bbl with refiners on the buy-side. EBOB was well offered, as Nov cracks came off from $29/bbl to $27.80/bbl, with gasnaps seeing selling down to $170/mt in Dec. Spreads weakened down the curve as well, with nov/dec coming off from $72/mt to $68.25/mt.

This morning in naphtha was quiet and softer overall, with MOC offered and spreads weakening with Brent spreads. Prompt MOPJ cracks were initially supported, with Nov rising from around $5.70/bbl to $6.20/bbl before ending near $5.90/bbl; spreads were better offered, with bal Oct/Nov trading at $31–32/mt, Nov/Dec at $36.50/mt versus $39.50/mt last night, and Dec/Jan at $29.75–30/mt. E/W was mixed, with front buying, but Q1 and Q2 offered: Nov traded up from $83–83.75/mt, while Q1 fell from $64.50 – 64/mt and Q1/Q2 traded at $16.25/mt, with the Dec/Jan box firm at $10.25/mt. NWE naphtha weakened, with Nov cracks moving from -$2.85/bbl last night to -$3.50/bbl before recovering to -$3.25/bbl and ending around -$3.35/bbl; the Dec/Jan and Jan/Feb crack rolls traded at $0.35/bbl and $0.85/bbl respectively, while spreads were illiquid, with Nov/Dec at $34/mt post-window, Dec/Jan down from $21.25/mt last night to $19.50/mt and Jan/Feb easing from $23/mt to $22/mt.

This morning in NGLs, Nov/Dec'26 FEI was down slightly off of a weaker crude trading at $43.00/mt pre window before declining to $41.00/mt by the close. Dec/Jan'27 FEI fell more trading at $39.00/mt and $38.00/mt before falling to $36.50/mt at the end of the window. Off the back of the weaker FEI, FEI/CP also weakened with the Nov/Dec'26 FEI/CP cross trading at $258.00/mt post window and Nov'26 FEI/CP traded at $236.00/mt down from yesterday’s highs of $250.00/mt. Dec/Jan'27 CP traded at $17.00/mt which was down slightly from printing $18.00/mt yesterday. FEI/MOPJs were slightly better bid this morning on the lower crude with Q1'27 FEI/MOPJ trading at -$48.00/mt vs the -$50.00/mt levels yesterday. However, by the end of the window, Q1'27 FEI/MOPJ print back down to -$50.00/mt. The Arb was much stronger this morning driven by the FEI weakness. The Nov'26 Arb traded at -$395.00/mt pre window before rallying to -$388.00/mt by the close. Dec'26 LST/FEI traded at -$356.00/mt and -$355.00/mt before stepping up to -$352.00/mt print post window. On screen, Nov'26 FEI was trading at $934.00/mt to close.

Bonds finally become attractive. Long term yields have clearly turned lower, with gold a benefactor. U.S. 10-year & 30-year both fall 6bp, with 2s/10s 10bp off its recent highs. The dollar makes new 18-month highs, but this looks vulnerable too based on the bond market moves. Korean stocks fall -5.5%, down -35% from the highs.

Blackrock just cut US stocks to neutral and turned bullish on treasuries
134 S&P 500 stocks are down 40% or more from their highs - roughly 27% of the entire index. Yet the index itself sits just 0.1% from all-time highs. This is not a bull market. It is a handful of stocks holding up a crumbling foundation.

US economic data have increasingly been disappointing analyst expectations, with the Bloomberg US economic surprise index turning negative in the past few weeks. This is edifying concerns that consumers will soon run out of steam to keep spending as much as prices keep rising.

China's housing market just erased two decades of gains. However their savings rate is the highest in the world at 34.9%

France's economy grew just 0.1% in Q3, following stagnation in Q2, according to the Bank of France. Rising energy costs, weak manufacturing and sluggish construction continue to weigh on growth……Fitch Ratings warns that France's A+ credit rating is under pressure from rising government debt, weak economic growth and political instability.