Brent remains weak on expectations of easing supply

The drop in prices comes amid expectations of a glut due to Qatar reporting good progress on the Strait of Hormuz between the US and Iran, which concluded their talks in Doha. The next meeting between the two nations will take place after the 9 July funeral processions for Iran's late Supreme Leader Ayatollah Ali Khamenei, according to Qatar's Foreign Ministry. Elsewhere, at least five VLCCs (two headed to China, two to Japan - as per LSEG data) carrying Saudi crude oil loaded from Ras Tanura have exited the Strait of Hormuz amid Saudi Aramco's objective to ramp up sales in Asia, offering the crude to its Asian customers on a spot pricing basis, according to Reuters. Meanwhile, Nigeria has become the first OPEC member to join the IEA as an associate member. In other news, traders have reportedly sold gasoline produced by Nayara Energy to Russia, as per Reuters, amid a persistent fuel shortage in the region. Finally, at the time of writing, the Sep/Oct'26 and Sep/Mar'27 Brent futures spreads stand at -$0.47/bbl and -$0.49/bbl, respectively.

This afternoon in Brent/Dubai, we traded range-bound, with Aug Brent/Dubai trading between $5.70/bbl and $6/bbl. There was buying of Aug Dated/Dubai, buying of Sep ICE vs Aug Dub, buying by majors and selling by a trade house. Dubai spreads continued to trade weaker, down from -$1.50/bbl to -$1.73/bbl, bouncing slightly in the late afternoon back to -$1.63/bbl. There was some major buying of Aug/Sep and Sep/Oct Dubai. The Brent/Dubai boxes were very quiet OTC, trading slightly higher with the weakness in Dubai spreads. There was some trade selling of Q4/Q1'27 Brent/Dubai box at $0.77/bbl.

A quiet afternoon on VLSFO. Both Sing 0.5 and Euro 0.5 came under pressure. The Aug Sing crack traded down $12.75/bbl while the Aug/Sep Sing got down to $14.00/mt. It was a similar story on Euro 0.5 with the Aug Euro crack closing the afternoon at $4.55/bbl after temporarily going bid at the end of the window. Euro spreads were implied lower with Q4 Euro crack buying, with Aug/Sep closing the afternoon around $11.00/mt.

A quiet afternoon on HSFO. HSFO cracks drifted off throughout the day, with 3.5% barges being a touch weaker. The barge crack traded down from -$8.65/bbl to -$9.45 post-window on thin liquidity. Aug/ Sep Barges also traded down to $1.25/mt. 380 E/W strengthened on the barge weakness being implied up to $15.00/mt while the Aug 380 crack closed the day around -$7.00/bbl. 380 spreads were largely unmoved, with Aug/Sep trading about $0.50/mt.

This afternoon in distillates, Sing gasoil spreads were implied much lower with Aug/Sep ICE gasoil, trading from $3.10/bbl down to $3.00/bbl last, while the front gasoil E/W firmed slightly, with Aug lifted on screen at -$48.25/mt. Sing regrade was quiet but saw buying in the Aug/Sep regrade roll at -$0.65/bbl.

ICE gasoil spreads sold off across the curve, with Sep/Dec moving from $83.00/mt down to $79.50/mt, while cracks dumped to $46.20/bbl in Sep. European jet diffs shifted lower in Q3, with Aug trading from $71.50/mt down to $69/mt. Heating oil spreads were lower, while HOGOs rallied in Aug, moving from 29.00c/gal up to 30.10c/gal.

This afternoon in gasoline, EBOB flat price traded at $842/mt at the end of the window, with MOC mixed. RBBRs came off significantly, but Aug'26 arbs remained relatively stable around 30.20c/gal. EBOB cracks were well offered, trading down from $30.80/bbl to $29.20/bbl before finding support and rallying back to $29.80/bbl at the end of the window. EBOB spreads weakened as well, with Aug/Sep coming off from $47/mt to lows of $43/mt. Flows were thin in the east, with 92 cracks seeing mixed interest as Aug traded at $18.10/bbl.

This afternoon in Naphtha, it was a quiet window with mixed interest in NWE MOC. Naphtha crack got offered down during the window, with majors selling to trade on July crack, seeing July get sold down to -$3.60/bbl at the end of the window. Buyside in Cal 27 crack at -$8.30/bbl at the beginning of the window. The naphtha E/W traded at $36.50/mt at the end of the window, bid on, with deferred E/W boxes coming off slightly from this morning’s rally, seeing the Q4/Q1 box getting hit at $5.75/mt.

This afternoon in NGLs, FEI spreads had good sell-side interest, with Aug/Sep trading at $10/mt, similar to the morning’s trading level, and Sep/Oct at $3.50/mt. Oct/Nov strengthened across the afternoon from $0.50/mt to eventually trade at $1/mt at the end of the window. We had FEI/MOPJ selling out of Q4 at -$52/mt, $1 stronger than last night’s close. LST/FEI initially traded around the morning closing levels of -$202/mt in Aug before coming off in line with freight to eventually trade at -$212/mt by the end of the afternoon. Also had some Cal LST/FEI buying at both $159/mt and $160/mt. LST spreads had some buy-side interest in the deferred with Q1/3 27 trading at 6c/gal, and Q2/4 27 lifted at -0.875c/gal, both with US trade as buyers. In the front, Aug/Sep was lifted at -0.125c/gal and came off slightly at the end of the window to -0.25c/gal. In butane, C4 ENT spread buying in the front, with Balmo Jul/Sep lifted at -0.25c/gal, and Sep/Oct at -1.125c/gal. C4/C3 trading in Aug and Q1 at 19c/gal and 16.625c/gal, respectively, with both strengthening slightly into the end of the window.