Brent opens lower as Trump calls off strikes on Iran

This comes as President Trump called off weekend strikes on Iran, saying the “perimeters” of a deal were there. Trump also said that negotiations were to begin on Monday afternoon but did not provide any further details. Meanwhile, Iranian Foreign Ministry spokesperson Esmaeil Baghaei said there are no talks with the US, with no plants to receive a delegation or send an Iranian one, adding that a new Hormuz route being discussed with Oman will be one path with entry and exit lanes. In other news, OPEC+ agreed to boost production by 188kb/d from September. BP has completed the sale of its Gelsenkirchen refinery to investment firm Klesch Group, expecting about a $1 billion reduction in underlying operating expenditure as the oil major simplifies its operations. Iraq’s state oil marketer SOMO has offered steep discounts on its August-loading Basrah crude to entice buyers to lift cargoes from inside the Strait of Hormuz, with discounts of $25 to $27/bbl for Basrah Medium, and $27.80 to $29.80/bbl for Basrah Heavy. Finally, the Oct/Nov’26 and Oct/Apr’27 Brent futures spreads are at $2.30/bbl and $7.59/bbl respectively.

This morning in Dated we initially saw some selling of Aug/Sep Dated down to $4.25/bbl. We saw buy side interest in 28-2 Oct 1-week bid at $0.65/bbl and buying of 26-30 Oct 1-week lifted at $0.48/bbl. In the front we saw 3-7 v Cal Aug trade down to $2.00/bbl and sell side interest in 3-9 Sep v Cal sep offered at $0.95/bbl.

A quiet start in Brent/Dubai, as we opened $6.35/bbl in Sep B/D, selling off to $5.9/bbl into the window and trading rangebound after. Volumes were very low, with mostly products selling of B/D. There was some products selling of Q4 B/D, which traded $4.77/bbl down to $4.72/bbl. The Dubai spreads traded lower given the move lower in Brent flat price, but strengthened relative to Brent spreads, with B/D boxes moving lower. The Sep/Oct Dub spread traded down from $0.8/bbl to $0.57/bbl, smalls bank sellside interest.

It was a similar story on HSFO, Sing product came under pressure early on. Aug/Sep Sing opened $6 lower compared to Friday nights close, trading around $19.00/mt. Sep/Oct 380 bottomed out around $20.00/mt before recovering to $21.50/mt by the close of the morning. 380 E/W remained fairly resolute trading around $37.00/mt for the majority of the morning. It was a similar story on barge crack which traded around -$9.60/bbl for the majority of the morning.

A weaker to start to the new month on VLSFO, crude came off as a result of bearish news over the weekend. Sep/Oct Sing traded down to $40.00/mt from Fridays close of $42.50/mt. The Sing crack was also weaker on bearish E/W sentiment, closing the morning around $20.00/bbl. Euro 0.5 was largely illiquid but there was an axed buyer on Q4 Euro crack resulting in the spreads being implied a fair bit lower. Sep/Oct Euro was implied down to $27.00/mt.

This morning in distillates, Sing gasoil spreads saw buying initially before selling came in, with Aug/Sep trading from $9.1 up to $10.0 before coming back to $9.2/bbl post window. EW opened higher before selling off, with Sep trading from -$60 down to -$63.5, while Q4 opened at -$65 before being hit down to -$69/mt. Regrade was quiet overall, with Sep trading at $1.0, while Q4 traded at $3.0/bbl.

Prompt ICE gasoil spreads opened lower before trading rangebound, with Sep/Dec trading between $170 and $180/mt, while Oct cracks sold down to $64.7/bbl. Heating oil spreads opened lower, while HOGOs were rangebound, Sep HOGO swap around 25.5c/gal.

This morning in gasoline the East was a lot weaker. MOC was well offered, 92 cracks got sold down from $20.45/bbl to $19.50/bbl in Sep, and spreads came off from $5.70/bbl to $5.15/bbl in the front. EW opened weaker at -$9/bbl in Sep and traded down to -$9.50/bbl with EBOB also opening weaker: Sep cracks were trading at $29.30/bbl and Sep/Oct was balanced around $77/mt.

This morning in Naphtha, Sep MOC better bid with trade lifting +5c for decent size. In the morning EW gets hit $37/mt in Sep, down $4/mt from Fridays close of $41/mt but finds some strength into end of window trading up to $40/mt. Scale back buying in Sep/Oct EW box which gets sold, seeing $0.5/mt, flat and -$0.5/mt getting sold. Sell side interest in the Sep/Oct MOPJ crack roll at $1.7/bbl. Physical buyside of Dec/Jan MOPJ this morning at $12.5/mt. Sep Europe crack trading relatively rangebound this morning, opening at -$2.75/bbl and strengthening to -$2.6/bbl before get sold down to lows of -$2.9/bbl.

It was a relatively quiet start to the month in NGLs this morning. There was some early FEI flat price buying from Chinese out of Oct at $630/mt. Fullmo Aug/Sep FEI opened the day at $34/mt before strengthening to $36/mt, and Sep/Oct traded up to $24/mt from $22/mt. Dec/Jan FEI was sold at $13/mt, down $1 from Friday’s closing level. There was a Q4 LST/FEI buyer at -$250/mt, and Sep arb was trading at -$299/mt, before strengthening to print -$296/mt end window. Also had some good Aug FEI/MOPJ sell side interest at -$88/mt and -$81/mt. End window on screen, Sep FEI flat price was hit down from $659/mt to $656/mt.

* Bond yields dominate markets.
1. Saudi threaten to sell treasuries to prevent Trump from his ‘massive;’ attack on Iran, Brent falls 5.4%.
2. The US Treasury intervened in yen exchange rates on Friday, marking the first time Tokyo and Washington joined forces to support the Japanese currency via outright purchases in nearly 30 years. To prevent Japan’s MOF selling further Treasuries to fund intervention. Yen is 4.5% lower in 3 days. Dollar index trading back below 100.

* US 30-year making new cycle highs at 5.23%, its highest level since 2007 (mortgage rate approach 7%, at 6.75%), UK 30-year now just 6bp from cycle highs.

* Asia today saw manufacturing PMIs and huge divergence. For most of Asia, the news is very positive with Japan, Korea, Taiwan, Southeast Asian economies like Thailand and Vietnam doing well. Meanwhile, China and Indonesia are lagging. The official manufacturing PMI for China is even worse so that means State Owned Enterprises are doing badly. Private sector also weakening too.

* Last week saw the 2nd largest Hedge Fund de-grossing of the last decade.

* Retail investors are selling US tech stocks at a record pace: Retail investors sold -$316 million of US-listed information technology stocks on Wednesday, the largest daily sale on record. Over the 3 days ending Wednesday, retail investors sold -$643 million of tech stocks, the largest such outflow since data began in 2019.

* The Nasdaq just posted its worst July in 22 years. The Nasdaq-100 fell 6.6% in July, while semiconductor stocks led the decline, with SOXX down 22.1%, its worst month since 2002. Unlike previous selloffs driven by a single catalyst, this correction reflects concerns over AI valuations, crowded positioning, and rising Chinese competition.

* The Kospi yo-yo, down -5.1% today after +17.9% on Friday.

* The death of Fed forward guidance has a direct and underappreciated consequence: almost every meeting is now live. Investors can no longer front-run policy decisions with confidence, will repeatedly be caught off-guard, & the resulting uncertainty will drive structurally higher volatility across both bond and equity markets. This isn't a future risk - it is arguably already playing out in the form of a rising term premium, persistently elevated long-term interest rates, & an equity market that lurches rather than trends.

* Sulphur prices continue to rise, affecting global copper, uranium, nickel & agricultural production