Brent falls to $108 on renewed US-Iran negotiation hopes

Iran says the ball is now in Washington’s court after passing its latest Hormuz plan through Qatari mediators, adding that no final agreement can be reached, and the strait cannot reopen, until the US naval blockade ends and its demands are met. Iranian negotiators left Doha on Sunday, though an official told Reuters it was not because of difficulties, and Iran says message exchanges with the US are continuing. Trump has said Washington will not launch new attacks on Iran before the midterm vote and has called the talks productive, but has not ruled out military action afterwards, warning that Tehran will either make a deal or “the hammer” will come down. Shipping is still being hit: UKMTO logged one new incident in the past day, a vessel struck by an unidentified projectile at around 15:00 UTC on Sunday, while the IRGC separately said two oil tankers exploded after hitting a mine, one of them a supertanker. In Europe, Germany’s gas storage industry warned that reserves are at 61.35% ahead of winter, below the country’s 80% target. Finally, at the time of writing, the Jan/Feb'27 and Jan/Jul'27 Brent futures contracts stand at $3.24/bbl and $14.75/bbl.

Quiet start this morning, with some sell-side interest in the prompt, with December'26 leading the Dated complex lower. Nov'26 DFL dipped from $4.25/bbl to $4.10/bbl on real buying at $4.25/bbl and $4.20/bbl in size, then back to $4.25/bbl. Dec'26 DFL fell harder, from $5.70/bbl to $5.10/bbl, before bouncing to $5.35/bbl, roughly 70c under Friday’s close. That took the Dec/Jan'27 DFL roll down to $1.12/bbl, nearly 30c lower on the day, while Jan'27 DFL traded around $4.25/bbl and Jan/Feb'27 DFL slipped from $0.50/bbl to $0.45/bbl. Nov'26 Dated softened from $114.50/bbl to $112.95/bbl, with size going through at $113.90/bbl, and Nov/Dec'26 Dated was sold down from $2.90/bbl to $2.35/bbl, with a Refiner selling at $2.37/bbl.

This morning in Brent/Dubai was initally quiet, with only bank selling of Nov'26 Brent/Dubai. There was also some Chinese selling of Nov'26 Dated vs Dec'26 Dubai. The Dubai physical window priced extremely weak, with the Nov/Dec'26 spread trading $2.80/bbl on Friday evening, and pricing -$2.50/bbl. This saw the Brent/Dubai rally, up from -$2.70/bbl to -$1.05/bbl, the Dec/Jan'27 dub spread down from $3.00/bbl to $2.00/bbl, and all of the boxes higher. Post-window, as we continued to rally, there was refiner buying of Nov'26 Brent/Dubai, asian selling of Feb'27 ICE vs Dec'26 Dubai, and tradehouse selling of Dec'26 Brent/Dubai.

It was a very quiet start to the month in Fuel, Sing 0.5 weakened after a very strong October'27. Bal Sing spread opened 75c lower at $43.25/mt and then traded down to $42.50/mt, Dec/Jan'27 is yet to trade while Jan/Feb'27 traded a dollar lower to $36.00/mt, Dec'26 Sing crack saw better liquidity trading down 70c to $26.50/bbl by window open, it shed another 50c in the window and a further 50c post window trading down to $25.50/mt, Dec'26 0.5 e/w has traded at $170.50/mt. Euro 0.5 was very thin this morning, Nov/Dec'26 has traded down 25c to $18.25/mt in low volume while the rest of the spreads have yet to trade, Dec'26 Euro crack is trading at -$0.75/bbl.

380 saw better liquidity and weakened, Dec/Jan'27 sold off from $45.00/mt to $41.00/mt post window and has since traded back up to $42.50/mt, Nov/Dec'26 shed $3.50/mt to $60.00/mt. Dec'26 380 crack opened at $7.70/bbl and quickly sold down to $6.90/bbl where it found support and traded between $6.70/bbl and $6.90/bbl for the remainder of the morning, Dec'26 380 E/W has traded 3 dollars lower to $112.00/mt. Barge complex was very illiquid this morning, spreads have yet to trade while Dec'26 Barge crack has traded at -$11.00/bbl.

This morning in distillates, Sing gasoil spreads were more sell side in Dec/Mar'27, with Feb/Mar'27 offers stepping down to $3.90/bbl. E/W saw decent buying at lower levels in the front, with Nov'26 trading from -$150.00/mt up to -$145.00/mt, while 2H E/W was offered at -$58.00/mt. Regrade weakened, with Dec'26 trading from $1.64/bbl down to $1.40/bbl and Nov'26 hit down to flat. Prompt ICE gasoil spreads were range-bound, with Nov/Dec'26 trading between $62.00/mt and $64.50/mt, while Jan'27 futures cracks remained around $68.40/bbl.

This morning in gasoline, the east opened a lot weaker. Cracks opened lower at $12/bbl and got sold down to $10.80/bbl with funds and trade houses on the offer. Spreads were offered as well, as Dec/Jan came off from $1.90/bbl to $1.15/bbl, pushing Dec E/W down to lows of -$0.25/bbl. EBOB weakened as well, with Dec cracks trading down from $11.90/bbl to $10.75/bbl and Dec/Jan softened from $8.50/mt to $7/mt before rebounding to $8.25/mt post-window.

this morning in naphtha, MOPJ MOC was better bid in Dec'26 trading +5c. There was MOPJ flat price buying end window but spreads were better offered by physical with Dec/Jan trading $39.50/mt end window and Jan/Feb down to $36.00/mt. E/W was more offerside with Dec'26 E/W trading $80.00/mt and Q1'27 E/W selling at $62.50/mt. Euro cracks were also weighted sellside in the front trading down to -$4.20/bbl in the window before recovering to -$4.10/bbl end window. Euro sprs were relatively quiet in the morning but there was scaleback decdec buying down to $235.00/mt.

This mornio $75.5/bbl.

This mornio $75.5/bbl.

This morning in NGLs, FEI structure was slightly higher during the window. Nov/Dec'26 FEI traded at $66.50/mt and $67.00/mt from opening at $65.00/mt. Dec/Jan'27 FEI traded up to $63.00/mt after opening around $62.00/mt. Dec/Dec'26 FEI traded at $340.00/mt this morning. On screen Dec'26 FEI was trading $1017.00/mt before seeing real interest around $1005.00/mt levels. Q2/Q3'27 FEI also traded at $62.00/mt where there was Major buying at those levels.

FEI/MOPJs were firm this morning but felt weaker towards the end of the window as FEI structure weakened. Q1'27 FEI/MOPJ traded consistently around -$19.00/mt after opening at -$20.00/mt. The FEI/CP was implied weaker as CP remains stickier off any crude moves. It first traded at $310.00/mt in Dec'26 before being implied $304.00/mt to close. CP spreads were illiquid with Dec/Jan'27 CP opening at $5.00/mt before stepping up slightly to $6.00/mt. The Arb was fairly illiquid today with the Q1'27 arb trading at -$273.00/mt and the Jan'27 Arb trading at -$314.00/mt.

The Fed held rates at 3.75% to 4% in a 10-2

Markets enter the week on the back foot following Friday’s broad risk-off move, with equities, commodities and crypto under pressure, although FX remains surprisingly contained.

US Treasuries are broadly unchanged ahead of a pivotal week. Wednesday’s quarterly refunding announcement could deliver the biggest change to issuance guidance since early 2024, while Friday’s NFP is expected to show just 65k jobs, with unemployment steady at 4.2%. Tuesday’s midterms add another layer of event risk, with a potential split Congress historically supportive of Treasuries. Meanwhile, Dallas Fed's Logan believes rates need to be at least 50bp higher to become modestly restrictive.

UK-EU relations are back in focus, with renewed discussion around potential UK re-entry and regulatory alignment. France's fiscal concerns are mounting, with Fitch moving its outlook to negative on weaker growth, higher borrowing costs and a wider deficit.

The BOJ held at 1.25% in a hawkish decision, keeping December as the central case for a 25bp hike. USD/JPY is back near 158.00, with intervention warnings continuing. Australia is firmly in focus ahead of tomorrow's RBA decision, with 32/35 economists expecting a 25bp hike to 4.85% as inflation reaches 4.9% y/y. China delivered mixed signals. RatingDog manufacturing PMI held at 52.0, but official PMI fell to 49.3, back in contraction. Regulatory support helped Chinese equities rebound, while South Korea's KOSPI gained 3.0% on strong exports.

Week Ahead:
Monday: US ISM Manufacturing PMI
Tuesday: US JOLTs Job openings, RBA Interest Rate Decision
Wednesday: US ISM Services PMI
Thursday: BoE Interest Rate Decision
Friday: US Non-Farm Payrolls, US Unemployment Rate, US Michigan Consumer Sentiment
Saturday: China Inflation Rate YoY