Brent Strengthens As US Diesel Prices Reach Record Highs

In the news, US diesel prices have hit a record high, with the national average climbing to $5.820/gal, according to GasBuddy. This has topped the previous record of $5.819/gal set in Jun 2022 after Russia invaded Ukraine. 2026 is on track to be the most expensive year for diesel in US history. Further, Northern Hemisphere harvest activity, Southern Hemisphere planting prep, and the usual seasonal pickup in heating oil demand are expected to support diesel consumption as well. Elsewhere, Russia will slightly reduce its oil output this year, Deputy PM Alexander Novak said, though he called the dip temporary, with production set to rise once domestic refineries complete scheduled maintenance. A government draft forecast seen by Reuters this week showed Russia has downgraded its 2026 oil output forecast to a 17-year low and revised fuel export outlooks for 2026-2027 due to the war with Ukraine, cutting 2026-2029 production estimates by 16-20Mmt versus the May outlook. Speaking on the sidelines of an economic forum in Vladivostok, Novak said Russia is currently seeing a "partial decline" in production versus forecast, partly due to refineries running below capacity from unscheduled maintenance. Output is expected to recover as refineries resume normal operations. In other news, the IPO for Nigeria's Dangote refinery, Africa's largest, will open in the next 10-12 days, owner Aliko Dangote has stated. Speaking to investors and analysts in Botswana, Dangote said the plan is to double the refinery's capacity to 1.4mb/d. The 650kb/d refinery hit full nameplate capacity in February and has already tested output as high as 700kb/d. Dangote also said the secondary listing of Dangote Cement on the London Stock Exchange — another flagship of his industrial empire — will most likely land in October, a move that could widen its access to international investors and capital. Finally, as of the time of writing, the Nov/Dec’26 and Nov/May’27 Brent futures spreads are at $3.77/bbl and $14.32/bbl, respectively.

This afternoon in Dated we saw better buying return pre-window with 7-11 Sep 2-week trade up to $0.30/bbl and 14-18 1-week trade up to $0.65/bbl. The physical window was quiet again with no bids or offers. In the paper window we saw better buying of CFDs again. A major was selling 7-11 Sep at $6.25/bbl whilst 28-2 Oct CFD was lifted by a trade and major in good size. Post-window DFLs eased and we saw 7-11 vs 14-30 bought at $0.12/bbl.

This afternoon in Brent/Dubai we reversed most of the move lower, as there was buying of Nov'26 and Dec'26 EFS by major. The Oct'26 Brent/Dubai traded up from $2.20/bbl to highs of $2.75/bbl, before settling back at $2.55/bbl. There continued to be lots of buying of Oct/Dec'26 dub spreads by bank and tradedhouse, between $4.70/bbl to $4.45/bbl. There was some refiner selling of this Oct/Dec'26 Dubai spread. The boxes traded largely range-bound, more sellside interest by trade in the Nov/Dec'26 box. There was also continued refiner selling of Q2'27 and Q3'27 Brent/Dubai.

In VLSFO, Sing 0.5% spreads sold off with Oct/Nov trading down from $36.00/mt to $35.00/mt while the Oct crack was rangebound trading around $18.40/bbl. Euro 0.5 spreads also sold off slightly with Oct/Nov shedding 75c in the window from $16.75/mt to $16.00/mt. Oct Euro crack traded between $4.00/bbl and $4.20/bbl, Oct 0.5 E/W traded around $91.50/mt.

In HSFO, 380 complex saw some downside pressure this afternoon, Oct/Nov traded down to $15.00/mt and the Oct crack encountered real selling from -$5.50/bbl to -$6.25/bbl. Barge spreads remained quite stable this afternoon with Oct/Nov trading between $12.75/mt and $13.00/mt while the crack sold down to -$11.50/bbl.

This afternoon in distillates, Sing gasoil spreads saw some buying in Nov/Dec'26, trading up to $5.30/bbl. Front E/W was also bid up on EFS buying, with Oct'26 moving from -$93.00/mt to -$90.00/mt. Regrade was well bid in Dec'26, trading up to $3.40/bbl while prompt regrade rolls came off on kero spread selling.

Prompt ICE gasoil spreads sold off initially before rallying, with Oct/Nov'26 trading from $63.00/mt down to lows of $59.00/mt before recovering to $63.75/mt. Nov'26 cracks traded down to $72.00/bbl, then rallied back to $73.50/bbl into end window. European jet diffs sold off in the front, with Oct'26 moving from $83.50/mt down to $79.50/mt last.

This afternoon in gasoline, MOC better bid with refiners and trade houses buyside of Oct. Lack of selling in Oct/Nov EBOB this afternoon, seeing Oct EBOB crack trading up to $30.50/bbl end of window. Scale back selling interest in Cal EBOB crack today from a bank at $19.45/bbl to $19.75/bbl.

This afternoon in naphtha was quiet, with very low window volume and MOC slightly better offered. NWE naphtha was choppy on cracks after the morning bid, with Oct'26 trading down to -$4.10/bbl before recovering towards -$3.40/bbl and then offered back to -$3.60/bbl post-window; backend cracks followed suit, with Q1'27 down from -$4.70/bbl to -$4.90/bbl, while Cal 27 was broadly around -$6.85/bbl to -$7.00/bbl. Spreads were illiquid and better offered, with Dec/Jan'27 easing from $18.00/mt this morning to $16.75/mt before recovering around $17.00/mt, while Oct/Nov'26 traded at $28.00/mt and Nov/Dec'26 at $27.00/mt in smalls post-window. E/W had low interest, with Oct'26 around $56.00/mt, Q1'27 at $44.00/mt and the Q1/Q2'27 roll trading $8.50/mt. MOPJ was illiquid in the window, with smalls flat price sold late; cracks were broadly steady versus the morning, with Q1'27 around $0.10/bbl, Q2'27 around -$3.15/bbl and Q4'26 around $2.45/bbl, while spreads were softer, with Nov/Dec'26 around $28.50/mt and Dec/Jan'27 around $22.50/mt.

This afternoon in NGLs, FEI spreads traded at similar levels to the close of the morning window, with Oct/Nov'26 at $33.00/mt, and Nov/Dec'26 at $28.00/mt. There was also some Dec/Dec'26 FEI selling at $151.00/mt, up from last night’s closing level of $147.50/mt. Oct'26 LST/FEI seemed primed to sell off, but found support at the -$369.00/mt level, and closed the afternoon at -$368.00/mt. Q4'26 LST/FEI was trading at -$339.00/mt, up from the previously traded morning level of -$342.00/mt. There was also sell side interest in the Q1'27/2H'27 LST/FEI roll at -$87.00/mt. Quiet afternoon in the US curves. Some sell side interest in LST spreads, with Balmo Sep/Oct'26 trading at 0.375c/gal, and Q4/1 was sold at 1.50c/gal up 0.25c/gal from last night's close. In butane, Oct'26 C4/C3 traded up across the afternoon, from 40.25c/gal to close the afternoon 41.25c/gal print with a size buyer at 40.625c/gal. Oct/Dec'26 C4 ENT trading at 3.50c/gal, and Q4/1 was sold at 9.25c/gal.