Brent retreats to $105/bbl as momentum cools off

Crude repriced higher amid continued Hormuz uncertainty despite diplomatic efforts between Iran and the US at the UN, as the deadlock between the two sides continue. In the news, the 110kb/d Novoshakhtinsk refinery in Russia’s Rostov region was taken offline following an overnight drone strike, showing near-daily attacks continue despite the US pushing for an energy truce. Russia has expanded its fleet of ships sailing under its flag with the number of registrations rising by 36% from January 2025 to June 2026, which comes as Europe and the US have stepped up enforcement against stateless vessels. Serbia’s Russian-owned NIS said it has applied for a new US sanctions waiver to continue operations after September 30, when the current one expires. Petrovietnam (BSR) has signed a framework agreement with ExxonMobil Asia Pacific for crude oil supplies for its refinery. Repsol anticipates about 90% of its crude oil supplies falling short of new EU methane requirements that are due to take effect in January. The EU’s energy commissioner has urged Donald Trump to maintain a “free flow” of diesel following the US president’s threat to cut off supplies, warning Europe already faces its “worst winter” for energy prices since 2022. Finally, the Nov/Dec’26 and Nov/May’27 Brent futures spreads are at $6.62/bbl and $18.16/bbl respectively.

This morning in Dated we saw initial Oct DFL buying up to $9.99/bbl before it came back off with spreads back down to $9.15/bbl. We saw buying of 19-23 Oct cal Nov at $6.4/bbl as well as buy side interest in 19-30 Oct v Cal Nov again. We also saw a refiner buying 25-29 Sep vs Cal Oct at $10.00/bbl. However did see selling of 5-9 Oct 1-week at $3.4/bbl and 12-16 Oct 1-week offered at $3.00/bbl. Further down the curve saw buying of Jan DFL and selling of Mar DFL.

This morning in Brent/Dubai, there was initially large Chinese selling of Dec B/D around $0/bbl, but once this was taken out, with refiner buying of Oct B/D, we rallied from -$3.6/bbl to -$3.1/bbl. The Dubai spreads weakened slightly, retracing some of yesterdays move from $7/bbl down to $6.5/bbl in the Oct/Nov Dubai spread. There was still some buyside interest in Oct/Dec Dubai spread around $10.25/bbl. The boxes traded higher in the front, the Oct through Dec boxes up around $0.2/bbl, the boxes behind down slightly. There was some bank buyside interest of Cal'27/28 box.

380 spreads were also thin this morning, Oct/Nov traded higher pre window from $43.50/mt to $45.00/mt, Nov/Dec saw better liquidity and traded between $31.50/mt and $32.00/mt. 380 cracks traded higher in the early morning although volume was tiny, Oct crack traded up from $2.80/bbl to $3.50/bbl pre window, it then came off quickly and traded around $3.20/bbl in the window. Barge complex was equally as thin as Euro 0.5, Oct/Nov traded at down from $22.50/mt to $21.75/mt in the window, Oct Barge crack has traded around -$9.10/bbl.

It was a quiet morning in Fuel, Sing 0.5% was weaker overall while Euro 0.5 cracks came off. Oct/Nov Sing sold down from $42.25/mt to $41.50/mt where it traded ruing the window, it slipped to $40.50/mt post window, Nov/Dec has traded down from $36.50/mt to $36.00/mt. Oct Sing crack opened higher and traded up to $24.10/bbl early this morning, it quickly sold down to $23.60/bbl and has traded around this level for the remainder of the morning. Euro 0.5% was very thin this morning, Oct/Nov has traded post window at $12.75/mt while Oct crack has traded at $0.40/bbl.

This morning in distillates, Sing gasoil spreads saw buying in the front after opening lower, with Oct/Nov trading from $4.3 up to $4.55/bbl. EW saw selling at higher levels before trading from -$130 down to -$133/mt into the window, then lifting back up to -$127/mt post window. Oct/Nov kero was well bid, while Oct regrade was lifted up to -$3/bbl. Prompt ICE gasoil spreads saw strength initially before selling off, with Nov/Dec trading to $63, then back to $59/mt while Nov cracks firmed from $78.5 to $81.0/bbl.

This morning in Gasoline, prompt arb weaker on the back of weak RBBRs, seeing prompt RBBRs down $5/bbl compared to 6pm yesterday. Interest in arbs flipped from offerside to buyside in Oct, seeing decent size buying at -7.5c/gal from trade and refiner. Still seeing selling from trade in Q2'27 arbs and Nov arbs. EW stronger on the back of weaker RBBR and EBOB, seeing EW rallying to -$10.75/bbl in Oct.

This morning in naphtha was choppy, with MOC mixed and E/W initially bid before coming end-window, while prompt Europe cracks were offered until crude dumped and front cracks found a bid. MOPJ softened versus last night, with Oct cracks down from around $1.20/bbl to $1.05/bbl, Nov around $2/bbl early and the Nov/Dec roll at -$0.80/bbl; spreads came off and were offered throughout, with Oct/Nov moving from $27.50/mt to $25/mt and Nov/Dec from $29/mt to $27.5/mt. E/W was choppy, with Oct bid up to $65/mt before falling to $62.50/mt on MOPJ crack weakness, whilst front boxes came off, with Oct/Nov down to flat, Nov/Dec down to $1.50/mt from $2/mt and Q1 easing from $48/mt to $47.50/mt. NWE naphtha cracks opened weaker as Oct moved from around -$5.70/bbl to -$6.05/bbl before rebidding to -$5.85/bbl post-window, while the Oct/Nov roll was around -$0.80/bbl and Q1/Q2 traded up to $1.75/bbl with deferred Brent spreads lower overnight; spreads were offered but found a bid at the lows, with Oct/Nov down to $25.50/mt, Dec/Jan at $16.25/mt from $17.25/mt, and Jan/Feb at $20/mt.

This morning in NGLs was initially particularly quiet with a Chinese holiday so there was very little FEI flat price working. Eventually, FEI spreads opened at yesterday’s closing levels before softening across the rest of the morning. Oct/Nov FEI reached a trading level of $31/mt from $32.5/mt, and Nov/Dec closed the morning trading at $30/mt. There was also some deferred fly interest, with Aug/Sep/Oct 27 FEI trading at $4/mt, and Feb/Mar/Apr 27 was lifted at -$0.5/mt. As FEI was weaker across the morning, Oct LSTFEI was trading higher, closing the morning with a last traded level of -$378/mt having initially traded at -$383/mt to start the day. Q4 LST/FEI also trading at -$355/mt compared to last night’s closing level of -$358/mt. Post window there was a size buyer of the Oct C4 ENT / Nov C4 CP butane arb at -$76/mt, and the Nov C3/C4 CP was also trading at -$30/mt with some interest in the C4 CP flat price. End window on screen FEI flat price was lifted at $825/mt.

U.S. 30-year rises another 9bp and briefly touches 5.50%, the 10-year yield is up 70 basis points this month and the average interest rate on a 30Y mortgage in the US is up to 7.45%. That's up +150 basis points in 6 months.

Over 70% of S&P 500 stocks are down -10% or more from their 52-wk high and Only 51% of $SPX stocks are currently above their 200-day moving averages. Yet the index -is 0.5% from a record. The last time that happened was March 2000.

The ICE BofA MOVE Index, measuring Treasury volatility, surged +21% on Wednesday to its highest level since March, creating a growing divergence with the S&P 500. Meanwhile, the 30-day correlation between the ICE BofA MOVE Index and the S&P 500 has fallen to -0.6, its most negative level since mid-June, showing that stocks are becoming more sensitive to sharp moves in Treasury yields. A similar setup appeared in March 2026 and April 2025, when sharp increases in bond volatility coincided with major equity-market selloffs. This highlights why the speed of moves in Treasury yields matters more for stocks than the absolute level of yields.

Russell 2000 The most notable feature of the current setup remains the exceptionally weak breadth beneath the surface. Even as SPX sits less than 1.5% from its all-time high, more than 70% of its constituents are in a technical correction, trading at least 10% below their 52-week highs.

The problem with long term views is we actually have no idea what will happen today and tomorrow, let alone next week. Every big loss I ever took was simply due to being stubborn with my view. Price trumps everything….

Oracle shares fall another 3.5% on the news that they've declared "force majeure" on these datacentre payments. Oracle sent a force majeure notice on Project Jupiter, its AI data center in New Mexico built for the $400 billion Stargate deal with OpenAI. The campus needs a 17-mile gas pipeline to power its Bloom Energy fuel cells. New Mexico denied the pipeline permits twice.