Brent sub-$100 as US building military around Iran

Al Jazeera reports that a US official says three aircraft carriers and two amphibious assault groups are deploying around Iran, with the Roosevelt strike group and Makin Island force, carrying around 2,000 Marines, having departed San Diego. The full US military buildup is expected to be completed by November. UKMTO says a 2.5mb tanker was struck by an unidentified projectile while transiting the Strait of Hormuz, triggering a fire onboard and adding another incident to the recent disruption risk around the waterway. Reuters reported that the US has asked major European countries to release 800kt of diesel over six months, while G7 leaders may discuss next steps on Friday. France has proposed a wider IEA-coordinated release of 50mb of diesel and 50mb of crude, with any agreement potentially conditional on a US commitment to avoid a unilateral diesel export ban. However, Russia is considering a partial easing of its diesel export restrictions, with Deputy PM Alexander Novak previously saying exports could be relaxed as the domestic market recovers. Russia previously extended the producer diesel export ban until 31 Oct, citing the need to maintain domestic supply amid elevated seasonal demand. Yemen’s military says it carried out 20 airstrikes against Houthi positions across Sanaa, Saada and Taiz, targeting Houthi movements, reinforcements, gatherings and military vehicles, with the majority of strikes concentrated in Taiz province. ConocoPhillips has signed a 20-year LNG supply deal with Venture Global for 1mtpa from 2030, adding to the growing push by major energy companies to secure long-term US LNG amid tighter global supply expectations following QatarEnergy’s force majeure. Idemitsu Kosan has shut one CDU at its Yokkaichi refinery for planned maintenance, temporarily reducing crude processing capacity at the 255kb/d site. Finally, the Dec/Jan’26 and Dec/Jun’27 Brent futures spreads are at $3.43/bbl and $12.41/bbl, respectively.

Quieter morning in Dated. We saw some Chinese selling of Cal Oct/Nov'26 DTD and OTC selling of balmo Oct'26 DFL down to $13.05/bbl and offered over. However, continued to see buy side interest in rolls with residual buying of $29.00/bbl-4 Nov/Cal Nov'26 at $3.28/bbl and buy-side interest out of $9.00/bbl-13 Nov'26 3w, although did see a scale-back seller of Nov/Dec'26 DFL from $1.17/bbl to $1.25/bbl. Further down the curve saw some buy-side interest in Q127 DFL from financials player.

A strong start to the month on Sing 0.5 this morning. Spreads were better bid off the bat with Nov/Dec'26 trading up to $38.00/mt fairly quickly from overnight levels of $36.00/mt. Cracks in Nov'26 traded as high as $22.50/bbl in the window from $22.00/bbl before relaxing post window down to $22.25/bbl. The spread followed this trend closing the first morning of the month around $37.00/mt. Euro 0.5 had a fairly subdued start to the month, with the crack being fairly well offered down to $0.50/bbl from around $1.10/bbl last night. Euro spreads were weaker as a result with Nov/Dec'26 offered down to $13.00/mt, however there wasn’t a huge axe. The 0.5 E/W was better bid on legs implied around $138.00/mt

E/W continues to be well bid in HSFO, with a lot of support coming from the 380 complex. The Nov'26 380 cracks was bought up to $1.35/bbl from last night close of $0.40/bbl. 380 spreads were bid out of Singapore early doors with Nov/Dec'26 380 bid up to $35.00/mt fairly quickly. As mentioned the E/W was supported due to 380 strength, trading up to $74.50/mt in Nov'26. Barges was relatively quiet this morning. The barge crack was offered down on screen in small size with bids getting hit around -$10.30/bbl. The spreads came under pressure as a result with Nov/Dec'26 around $16.00/mt.

This morning in gasoline, Nov'26 E/W stronger at first trading up to -$1.60/bbl from yesterdays close of -$2.90/bbl, where it trails lower with interest in 92 spreads flipping to better offered. Pre window 92 was very well bid with the front crack trading from $30.00/bbl to $32.00/bbl, before weakening through the window back towards $30.00/bbl. EBOB slightly better supported, seeing Nov'26 E/W weakening from -$1.60/bbl to -$3.25/bbl. 92 MOC was better offered into end window. Also saw some buying in Q2'92 cracks $16.50/bbl with Q1'27 E/W still finding buying from a trade at -$4.90/bbl and -$5.00/bbl. 

This morning in Naphtha started illiquid and weak before finding support on propane strength, with MOC initially better offered before turning bid late into the window. Nov MOPJ cracks fell from $2.50/bbl last night to $2.05/bbl, while Dec eased from $1.60/bbl to $1.40/bbl before recovering to $1.50/bbl. MOPJ spreads opened bid on no volume before turning strongly offered as Brent moved lower, as Nov/Dec dropped from $33/mt to $28/mt before rebidding to $28.50/mt, while Dec/Jan moved from $27/mt to $26.50/mt. E/W opened supported in the back before going offered: Nov fell from $68/mt last night to $64.50/mt, then recovered to $65.75/mt on scale-back buying; Q1 eased from $48.25/mt to $48/mt and Cal 27 traded at $36/mt, while the Nov/Dec box fell from $3/mt last night to $1/mt offered before rebidding to $1.50/mt. NWE naphtha was softer and illiquid, with Nov cracks rangebound at -$5.30/bbl to -$5.40/bbl and the Nov/Dec crack roll at $0.35/bbl. Spreads-wise, Dec/Jan fell from $17.25/mt last night to $15.50/mt before recovering to $15.75/mt, Jan/Mar traded at $39.50/mt, while Nov/Dec was around $27/mt on a crack-roll basis.

This morning in NGLs, FEI was well bid in the front with Oct/Nov'26 spread trading at a peak of $44.00/mt before settling at $42.00/mt: up from $38.00/mt during yesterday’s window. Nov/Dec'26 FEI also rallied trading at $33.00/mt pre window and reaching $36.00/mt to close. This was primarily driven by a higher crude this morning pushing Oct'26 FEI flat price to $884.00/mt up from $860.00/mt whilst long end prices rallied less in comparison. Dec/Dec'26 FEI also saw some action trading at $196.00/mt up from trading at $190.00/mt yesterday, showing the steepening trend all down the curve.
CP was illiquid this morning Nov'26 CP traded up at $650.00/mt from $645.00/mt pre window. This drove a strong rally in FEI/CP as Nov'26 FEI/CP traded at $194.00/mt up from $182.00/mt pre window. FEI/MOPJs were weaker at the open off a strong MOPJ rally, with Oct'26 FMs printing at lows of -$46.00/mt before the FEI rally combined with turning MOPJ prices led to Oct'26 FMs rebounding to -$37.00/mt.Arbs were also well offered today with Oct'26 LST/FEI trading at -$374.00/mt down from -$360.00/mt pre window. Cal27 LST/FEI also traded at -$228.00/mt to end the window.

Long end yields continue to do the Feds work. With 30-year at 5.62% (briefly 5.70%) this effective monetary tightening takes the pressure of the front of the curve. 2yr fell 10bp and the 2s/10s curve rallied again to 46bp from 17bp on Just 23rd Sep.

This is a bond crisis: US 30Y yield highest since 2002, Japan 30Y yield highest since 1996, France 30Y yield highest since 2002, UK 30Y yield highest since 1996, Germany 30Y yield highest since 2011, South Korea 30Y yield highest ever, Australia 30Y yield highest ever, Netherlands 30Y yield highest since 2011.

As UK 30y yields punch above 6% it is in an even worse structural fiscal situation than the US.

French bond yields at widest spread to Germany since 2012 Euro crisis. Fiat stress, a typical old school sign of financial distress. The gold bull run will soon restart. France CDS widest in 13 years.

US manufacturing expanded for a ninth consecutive month in September, though the ISM gauge dipped 0.1 point to 54.5, missing Bloomberg consensus. It’s a diffusion index, above 50 = growth, blow 50 = contraction. Factories continue to navigate resurgent costs and shipping delays even as demand remains robust - the longest run of expansion since 2022.

Anthropic is seeking to go public as soon as the middle of November.

The next MAG 7 index - (MRVL, COIN, CRWD, PLTR, NOW, SHOP, NET) (Chart, Optuma, JC Parets)