Brent Strengthens as Houthis Pledge to Continue Attacks

In the news, the Houthis have pledged to keep targeting Saudi airports and oil infrastructure, claiming responsibility for a strike on Saudi Aramco's headquarters, which was hit the previous day. The Iran-aligned group says it fired ballistic missiles, cruise missiles, and drones at Aramco's Dhahran facilities, Riyadh's King Khalid International Airport, and an Aramco refinery in Riyadh, though it gave no timing. It also warned shipping companies, civilians, and workers to clear airports and oil sites, declaring them legitimate military targets. In other news, the IEA warned that diesel supply constraints could stretch well into next year as heavy unseasonal stock draws and curtailed production collide with approaching peak winter demand. Global refinery runs are expected to recover toward year-end, which should begin rebuilding inventories, but not enough to cover this year’s deficit. Elsewhere, the Trump administration is invoking the Cold War-era Defence Production Act to expand a Texas refinery owned by Delek US Holdings, Vice President JD Vance has said. Speaking in Tyler, Texas, Vance said the administration is working to boost output of both commercial-grade and military-spec fuel, adding "millions of gallons" on top of current production. The Tyler refinery, roughly 200 miles north of Houston, currently processes about 74kb/d. Neither the White House nor Delek confirmed funding allocations or how much capacity would be added. Relatedly, US President Trump has said that a "massive" oil, gas, and mineral exploration is about to begin in Greenland, though he has offered no specifics on the plans. He claimed experts believe the amount of easily accessible oil there is far greater than almost anywhere else on land in the world. Finally, as of the time of writing, the front-month (Dec/Jan) and 6-month (Dec/May’27) are at 2.74/bbl and $11.77/bbl, respectively.

Dated Brent softened this morning; the weakness concentrated in the prompt. Nov'26 DFL traded down from $4.30/bbl on screen to $4.00/bbl, with selling from real players at $4.10/bbl and $4.05/bbl before buyers stepped in there, last $4.10/bbl on screen; balmo DFL came off from $11.55/bbl to $10.50/bbl despite real buying all the way down; Nov/Dec'26 Dated was sold at $2.88/bbl, and has firmed since to $3.08/bbl. Dec'26 DFL traded $3.41/bbl on screen. In the days market, 14-22 Oct'26 was sold at $119.75/bbl; 02-06 v 09-13 Nov'26 came off from $1.15/bbl to $1.00/bbl despite buying; 19-23 Oct'26 v 09-13 Nov'26 traded down from $9.25/bbl to $9.00/bbl on selling, and has firmed since; 09-13 v 16-20 Nov'26 was sold at $0.85/bbl. On screen, Dec'26 Brent traded $105.54 to $105.94/bbl, last $105.88/bbl, and Dec/Jan'27 eased from $2.75/bbl to $2.67/bbl.

This morning in Brent/Dubai there was initially selling interest by refiner in Dec and Jan Brent/Dubai. Once this was taken out, there was continued buying in Q1 and Q2 Brent/Dubai by products, and the front Nov/Dec Dubai spread got smashed on screen. This saw the Nov brent/Dubai rally from -$1.80/bbl to -$1.30/bbl. At the highs leading into the window, we saw sell-side interest by a Chinese player and a fund, and we reversed the whole move higher. Some buying of Nov/Dec Dubai spread came in following the window, seeing the Nov/Dec dubai spread reverse some of its fall from $3/bbl to $2.60/bbl, finishing the morning at $2.80/bbl. The boxes were all pretty well offered by major as the front rallied, and ended up trading rangebound.

Sing 0.5 spreads opened lower this morning but encountered some buying at the start of the window, while Sing cracks opened higher and then sold off; Euro 0.5 traded at similar levels to yesterday afternoon. Nov/Dec'26 Sing opened 2 dollars lower at $28.00/mt and traded down to $27.50/mt, it was then bid up on screen to $28.00/mt during the window and $28.50/mt post window, Dec/Jan'27 saw very little volume but traded $1.50/mt lower at $28.00/mt. Nov'26 Sing crack opened 20c higher at $26.40/bbl, it was then offered down on screen and lacked any support until it hit $25.00/mt where it traded until the window started. It turned bid in the window and traded up to $27.80/bbl just after the window; it has since sold back down $25.30/bbl. Euro 0.5 remained illiquid this morning, and price action was muted; Nov/Dec'26 traded between $14.25/mt and $14.75/mt, while Dec/Jan'27 traded at $12.75/mt, Nov'26 Euro crack traded at $0.20/bbl in tiny size.

380 cracks continued to strengthen this morning while spreads remained stable; Nov/Dec'26 380 opened at $52.25/mt and traded down to $51.00/mt during the window before getting bid back up to $52.50/mt post window; Dec/Jan'27 traded between $38.50/mt and $39.00/mt. Nov'26 380 crack opened 35c higher at $11.65/bbl it traded around this level until just after the window, when it gapped up to $12.00/bbl and then continued to rally up to $12.35/bbl, Dec'26 crack traded up 30c to $6.30/bbl. Barge complex continued to struggle for liquidity this morning; Nov/Dec'26 traded once at $22.25/mt while Nov'26 crack traded up from -$8.00/bbl to -$7.70/bbl in 1kt while Dec'26 crack traded at -$9.00/bbl, 380 E/W strengthened considerably again this morning; it is implied 6 dollars higher at $28.00/mt.

This morning in distillates, Sing gasoil spreads saw buying step up initially in Nov/Dec'26, trading up to $4.25/bbl before running into some selling and trading back to $4.00/bbl. E/W saw strong selling in the deferred, with Q2'27 hit down to -$88.00/mt. Kero spreads were sellside, pushing Nov'26 regrade down to $1.50/bbl.Prompt ICE gasoil spreads traded range-bound, with Nov/Dec'26 between $43.00/bbl and $45.00/bbl, while Dec'26 cracks traded around $84.90/bb

This morning, Sing 92 MOC was slightly better bid. The East opened up strong, with Nov cracks trading up from $23/bbl to $23.60/bbl before weakening to $22.70/bbl during the window. Spreads were also better bid initially, with Nov/Dec trading up to $6.95/bbl before seeing better selling interest from trade houses down to $6.70/bbl. E/W continued to firm, opening higher at -$3.25/bbl and trading up to -$2.75/bbl as EBOB weakened. EBOB cracks weakened from $26.80/bbl to lows of $24.80/bbl before bouncing to $25.80/bbl post-window. Spreads saw good selling as well, with Nov/Dec coming off from $65/mt to $59/mt.

This morning in naphtha was weaker overall, with MOC offered with early flat-price selling from petchems, while softer Brent spreads pressured spreads across the curve. MOPJ cracks initially came under pressure from 92/MOPJ buying before finding some support post-window, with Nov'26 trading at $5.40/bbl versus around $5.70/bbl last night and Q1'27 at $0.95/bbl; spreads softened, with Nov/Dec'26 at $34.00/mt versus $35.75/mt. E/W was thin in the front, with Nov'26 offered around $80.00/mt before recovering towards $82.00/mt late on, while Q1'27 traded at $62.50/mt versus $64.25/mt and Jan'27 at $70.50/mt. NWE naphtha also weakened, with Nov'26 cracks down -$3.55/bbl to -$4.00/bbl before recovering to -$3.90/bbl, while Q1'27 eased from -$6.05/bbl to -$6.25/bbl; spreads came off, with Nov/Dec'26 down from $34.50/mt to $32.50/mt and Dec/Jan'27 from $19.50/mt to $18.00/mt, which helped push front crack rolls down, with Nov/Dec'26 around $1.25/bbl.

This morning in NGLs, FEI structure was firm, with Nov/Dec'26 FEI opening at $40.00/mt, trading at $39.00/mt during the window before stepping back up to $40.00/mt to close, as there was Major buying in the physical window. Dec/Dec'26 FEI also traded at $238.00/mt. Dec/Jan'27 FEI stepped up post-window to $38.00/mt after printing $37.00/mt this morning. There was buying in the LST/CP this morning, with the Dec'26 LST/CP trading at -$165.00/mt up from printing -$168 pre-window. FEI/CP was up, with Q1'27 FEI/CP trading at $173.00/mt before stepping up to $176.00/mt during the window. CP structure was also slightly stronger, with Nov/Dec'26 CP trading at $24.00/mt up from $23.00/mt pre-window and Dec/Jan'27 CP trading at $19.00/mt up from $17.00/mt traded yesterday morning.Nov'26 FEI/MOPJ printed $20.00/mt to close the window up from -$28.00/mt pre-window. Q1'27 FEI/MOPJ traded at -$49.00/mt, up from -$50.00/mt yesterday evening. Nov'26 LST/FEI opened around -$396 before trading at -$400.00/mt by the close. Nov'26 FEI was trading at $944.00/mt on screen to close.

Treasuries may be setting up for a sharp squeeze: CTAs are heavily short, the 10-year yield appears to have put in a short-term top, the MOVE index has just broken below 100, and the U.S. dollar rally has stalled. With 78bp of Fed hikes priced into OIS looking rich, and U.S. sovereign debt becoming attractive at some point (unlike French bonds or CoreWeave), bond shorts look exposed to the next big positioning shock as yields reverse lower.

China PPI rose to 5%YoY while CPI remains sub 1% at 0.9%. The increase of PPI to 5%YoY but soft CPI at 0.9% shows that margin compression continues to impact Chinese earnings and sentiment as the ability to pass on higher costs is limited.
BofA Poll Shows Investors Most Exposed to Tech Stocks Since 2020.

Just 10 stocks have driven about 70% of the S&P 500’s +23% gain since March 30th, led by Nvidia (13% of the gain) and followed by Micron, Apple and Microsoft (9% each), AMD (8%) and Alphabet (7%). The remaining 490 stocks have contributed just 30%, adding only +7 percentage points, so diversification looks dead.

Dimon: we're tightening up a little bit on credit………… Coreweave bonds now yielding 15%. Data centre financing.

Nvidia gets paid today, while the hyperscalers funding the AI build-out are watching their free cash flow shrink on a bet that only pays off tomorrow. According to JPMorgan, Nvidia’s projected cash flow gains exceed the entire expected decline in hyperscaler free cash flow, which is the same boom with very different economics. The biggest winners may be the suppliers collecting cash upfront, while their customers carry the risk and wait for demand, monetisation and utilisation to deliver.

The U.S. increase in mortgage rates is starting to slow housing.

Apple is now trading at nearly 11x sales, the highest valuation level in company history. Lithium prices have fallen -19.5% in the past month.