Brent falls below $73/bbl, Russia considers banning diesel exports

This morning Sep’26 Brent crude futures came off from the $76/bbl level, falling to $72.70/bbl and is testing the lows of yesterday, in line with prewar resistance. In the news, Russian authorities are considering a ban on the export of diesel for fuel producers for several months. Kazakhstan’s giant Karachaganak oil and gas field cut crude production by more than a quarter (34 to 25kt) after a Ukrainian drone attack forced the shutdown of a processing plant in Russia that handles its gas. Earthquake damage to Venezuela's oil infrastructure appears limited, with export terminals and major producing regions remaining operational, although power outages and localised damage at El Palito refinery and the Morón petrochemical complex pose a near-term risk to sustaining production. Saudi Aramco restarted oil loading activities at its Ras Tanura terminal after a nearly four-month break. Shipping data revealed that two VLCCs began loading crude, with another awaiting its turn nearby. China’s seaborne crude imports will average 6.4mb/d in June, the lowest since October 2016 and about 8% less than May according to preliminary data from Kpler. Finally, the Aug/Sep’26 and Aug/Feb’27 Brent futures spreads are at -$0.31/bbl and $1.05/bbl respectively.

Very quiet morning in Dated. We initially saw some DFL selling out of Singapore with Jul Dated vs Aug ice selling down -$0.5/bbl and selling of Aug DFL. We saw some selling of 6-10 Jul v Cal Jul at -$0.28/bbl and 3-7 Jul v Cal Aug at -$0.02/bbl. We saw a buyer of Q4'26 DFL bidding $0.21/bbl and Dec'26 DFL bid at $0.28/bbl. Further down the curve we saw some Q1'27 DFL selling at $0.25/bbl and continued bank buying of Q4'27 DFL up to $0.1/bbl.

This morning in Brent/Dubai we gapped lower, with Major selling of Aug and Sep B/D, Chinese selling of Oct ICE vs Aug Dubai. We initially moved lower from $6.3/bbl to $6/bbl. Then there was some buying of Sep Ice vs Jul Dub, and with a very weak window we traded up from $6/bbl to $6.46/bbl. Into the window there was large bank buying of Sep/Nov Dub spread. The Jul/Aug spread initially opened higher at -$0.9/bbl, before selling back off to -$1.11/bbl. The boxes reversed their initial moves lower, the Jul/Aug trading range bound between $1.1/bbl to $1.33/bbl. There was also a large major selling of Q4'26 B/D at $1.72/bbl.

A fairly similar story on HSFO this morning. Spreads came into the day fairly well bid with deferred cracks also well bid from banks. This supported the front crack which traded up to -$6.70/bbl from -$7.00/bbl. Although 380 spreads were well bid the buying didn’t step up, as a result the Jul/Aug remained around $0.50/mt. 380 E/W benefitted from 380 crack strength trading up to $17.00/mt. Barges came under some pressure this morning. The spreads went quite well offered with Jul/Aug selling down to -$0.25/mt with the Jul barge crack closing the morning about -$9.50/bbl.

Sing spreads have been bid side down the curve into 2027. However the buying wasn’t very aggressive, as a result we saw little price action on spreads. Jul/Aug remained around $20.00/mt while the Jul Sing crack was a touch stronger closing the morning around $14.70/bbl, up from $14.30/bbl. Euro 0.5 was fairly illiquid today, although a touch weaker, with a bit of a hangover from yesterdays aggressive Euro spread selling. The Euro crack was a touch lower at $8.40/bbl while Jul/Aug Euro got as low as $25.25/mt.

This morning in NGLs, Chinese were early FEI flat price buyers out of Sep at $549.5/mt. LST/FEI had interest in the prompt, with Jul trading at -$185/mt and Aug at -$173/mt, with both strengthening to -$179.5/mt and -$169/mt respectively by the end of the morning. There was also LST/FEI roll selling with Jul/Dec hit at -$10/mt and the Cal'27/Cal'28 at -$2/mt. FEI spreads opened at similar levels to last night’s close and were better bid on the morning due to the fact that the physical window was also better bid. In the prompt, Aug/Sep was trading flat, where it settled post window, and in the deferred we had Q4'26/Q3'27 buying at $53/mt. Aug/Oct’27 was also trading at -$12/mt. Quiet day in CP, although Jul/Aug was traded at $79/mt, and Jul FEI/CP was printing -$25/mt having opened at -$20/mt. There was no action end window on screen today.

This morning in NGLs, Chinese were early FEI flat price buyers out of Sep at $549.5/mt. LST/FEI had interest in the prompt, with Jul trading at -$185/mt and Aug at -$173/mt, with both strengthening to -$179.5/mt and -$169/mt respectively by the end of the morning. There was also LST/FEI roll selling with Jul/Dec hit at -$10/mt and the Cal'27/Cal'28 at -$2/mt. FEI spreads opened at similar levels to last night’s close and were better bid on the morning due to the fact that the physical window was also better bid. In the prompt, Aug/Sep was trading flat, where it settled post window, and in the deferred we had Q4'26/Q3'27 buying at $53/mt. Aug/Oct’27 was also trading at -$12/mt. Quiet day in CP, although Jul/Aug was traded at $79/mt, and Jul FEI/CP was printing -$25/mt having opened at -$20/mt. There was no action end window on screen today.

* The US economy is showing a balanced picture, with personal income and spending both up 0.7%, real consumer spending remaining positive, and the labour market staying resilient with jobless claims falling to 215,000. Inflation continues to cool, with Core PCE coming in at 0.3% month-on-month and 3.4% year-on-year - exactly as expected. With growth around 2.1%, no signs of recession, and no inflation reacceleration, the data points to a soft landing scenario, with the OIS pricing just 31bp hikes by year end.

* Asian markets suffered a massive single-day wipeout exceeding $1 trillion, led by South Korea's KOSPI (-8.2%), Japan's Nikkei (-4.5%), Taiwan (-3%), and China's SSE (-2.15%), triggered by Apple's price hikes to offset rising chip costs reigniting fears over stretched AI and tech valuations. The sell-off extended to US mega-caps, with the Magnificent 7 collectively down roughly $5 trillion from their all-time highs, marking their worst ever day relative to the Nasdaq-100 , with Microsoft and Meta each shedding over 30%.

* Apple has raised Mac and iPad prices by up to 25%, with Tim Cook citing soaring chip costs as "unavoidable." One of the first clear signs of AI-flation. The race to build AI is driving up semiconductor costs—and consumers are starting to pay the price.

* Stock trade defaults reported by securities firms in Taiwan rose to $62 million so far in June, the highest monthly total since data began in 2019. A stock trade default occurs when investors who bought shares on margin fail to pay for those purchases, or when sellers fail to deliver the shares required to settle the trade. Trade defaults have soared +300% over the last 2 months and now exceed the 2021 record by ~20%.

* Separately, enterprise AI spending is under significant pressure, with UBS reporting that 60% of companies monitoring AI budgets are shifting toward cheaper and open-source models. The drivers include extreme costs, and teams exceeding quotas by 200% - prompting companies to cut internal AI tools and adopt model routing strategies that reserve premium models only for complex tasks. Chinese open-source models like DeepSeek, Qwen, and others are filling the gap, fitting enterprise cost structures by running locally or via cloud catalogues, signalling a structural shift in how AI is consumed rather than an outright retreat from it.

* The change in hyperscaler vs chip stock free cash flow is stunning (Bloomberg).