Brent supported above $90/bbl as Iran weighs strikes on military targets in Europe if Trump escalates

In the news, Iran has weighed attacking US military targets in Europe, including bases in Bulgaria and Cyprus, in the event of an escalation, per FT sources citing regime insiders. Venezuela signed oil-related deals with two US companies, oilfield-services giant SLB and independent producer Hunt Oil, as Caracas and Washington push to accelerate investment in Venezuela’s vast but underdeveloped oil reserves. Shipping through the Strait of Hormuz has slowed, according to Kpler data, with six commodity vessels crossing on Tuesday, down from nine a day earlier and below the 10-day daily average of 11. Equinor is partnering with Chevron in Namibia, where the Norwegian producer agreed to acquire a 17.4% stake in exploration license 90 of the country’s Orange Basin from Chevron’s Harmattan Energy, which operates the prospect. BP said on Wednesday that it had started planned maintenance work at the Central Azeri platform (90kb/d) in Azerbaijan, which would last 11 days. Finally, the Oct/Nov’26 and Oct/Apr’27 Brent futures spreads are at $1.61/bbl and $9.60/bbl respectively.

This morning in Dated, we saw selling of 24-28 Aug v Cal Sep down to -$0.15/bbl and selling of 1-4 Sep v Cal Sep at $0.26/bbl. However did see some buy side interest 25-1 Sep v Cal Sep trading $0.03/bbl and 1-7 Sep v Cal Sep trading $0.28/bbl then bid up to $0.3/bbl. Further down the curve we saw some bank buying of Q1'27 DFL bid up to $1.21/bbl and fund sell side interest in Q4'27 DFL offered at $0.47/bbl.

This morning in Brent/Dubai was very choppy, the Sep bd trading rangebound between $3.95/bbl to $4.15/bbl. There was refiner selling of Sep through Dec Dubai spreads, trade house buying. The Sep/Oct Dubai spread recovered its early morning weakness, up from $3.13/bbl to $3.42/bbl. There was large trade selling of Oct/Nov and Nov/Dec B/D boxes. The Oct/Nov box traded down from -$0.13/bbl to -$0.23/bbl. There was continued fund selling of Dec B/D, some refiner selling of Q4 and Q1 B/D around $5.44/bbl and $4.7/bbl.

Sep/Oct 380 consistently traded at $39.00/mt during the window on moderate liquidity, it then briefly sold off to $38.50/mt before bouncing back up and finding support at $39.00/mt. Sep 380 crack was choppy trading up from $0.20/bbl to $0.60/bbl and then sold all the way back down to $0.10/bbl post window. Sep Barge crack traded between -$8.35/bbl and -$8.25/bbl during the window before encountering real selling donw to -$8.90/bbl. Sep/Oct Barge was rangebound trading between $38.50/mt and $39.00/mt. 380 e/w remained stable around $56.25/mt

Sing 0.5 spreads opened higher this morning with Sep/Oct getting up to $36.25/mt early this morning, as we have come to expect the spreads then sold off in the run up to the window and had traded down to $34.50/mt by then end of the window, it then shed another 50c to $34.00/mt post window. It was a similar story for the Sep sing crack, opening higher at $18.75/bbl before selling down to $18.10/bbl post window, it is currently $18.25/bbl value. It was a low liquidity morning for Euro 0.5, Sep/Oct traded between $21.00/mt and $21.50/mt while the crack was rangebound trading at $6.00/bbl.

This morning in distillates, Sing gasoil spreads saw selling in the front, with Sep/Oct trading from $6.7 down to $6.5, while Oct/Nov sold down to $6.52/bbl. Front EW remained well bid at -$69, while Q4 saw some selling down at -$58.5/mt. Sep regrade strengthened to -$4.25, and Dec regrade remained offered at $4.0/bbl. Prompt ICE gasoil spreads sold off, with Sep/Dec trading from $169.5 down to $167/mt, while Oct cracks weakened to $76.5/bbl.

This morning Gasoline, MOC slightly better offered in Sing 92 with real interest sell side in 92 cracks and spreads, seeing Sep/Oct 92 trade down from $5.5/bbl to $5.2/bbl with refiners sell side. E/W tanks across the curve with buying in quarterly E/W’s far less prevalent today, seeing Q1'27 see buying in small size at -$2.3/bbl with Oct E/W trading -$7.75/bbl end of window – with Sep EW coming off from -$13.8/bbl to -$14.65/bbl. EBOB better supported with Sep/Oct trading up to $100.5/mt. Buying in Sep-Oct 27 EBOB strip this morning at $13.3/bbl, seeing arbs pricing lower.

This morning in naphtha was bid overall, with MOC better bid and cracks supported, while spreads were mostly illiquid pre-window. MOPJ was stronger, with Sep cracks moving from around $0.3/bbl to $0.40/bbl and Cal 27 trading at -$5.30/bbl, while Sep/Oct spreads firmed from $24/mt to $25.25/mt and Oct/Dec traded around $43.50/mt. E/W was also supported, with Sep around $38/mt and the Oct/Dec box trading at $1/mt. NWE naphtha followed the bid tone, with Sep cracks opening around -$4.05/bbl, lifting to -$3.80/bbl before easing slightly to -$3.85/bbl, while Q4'26 traded around -$5.50/bbl and ended closer to -$5.60/bbl; spreads were quiet, with Sep/Oct around $26.50/mt and Dec/Jan around $11/mt.

This morning in NGLs, Sep/Oct FEI opened the morning at $23/mt where it firmed into end window. Oct/Nov FEI traded $15/mt, down $1.50 from yesterday’s closing level. In the deferred there was a seller of Apr/Jun'27 at $28/mt. Sep LST/FEI traded at -$320/mt across the morning, having opened the day printing at -$325/mt, and Q1'27 traded at both -$228/mt and -$227/mt. Sep FEI/CP was sold at $115/mt to start the day, and softened to close the morning at $112/mt. End window on screen, Sep FEI flat price was lifted at $719/mt.

USD/JPY suddenly pulled back from its rally since the US-Japan intervention. From 159.65 at the open today it dropped to near 159. Strong June machinery orders data from Japan (+16.9% y/y) is encouraging, but the monthly data is very choppy due to volatile components such as chips and electric utilities.

US pending home sales fell by 2.3% m/m in July against market forecasts of a 0.3% rise. This marked the second consecutive monthly decrease, with contract signings falling across all four major regions: the West (-4.7%), the South (-2.2%), the Northeast (-2%) and the Midwest (-0.7%).
US stock indices closed lower amid a selloff in chipmakers. The S&P 500 fell 0.7% while the Nasdaq 100 lost 1.7%.

Chipmakers tied to the AI trade posted sharp losses, with Nvidia down 2.3%, Broadcom shedding 3.2%, Micron losing 7% and AMD retreating 4.3%. Intel tumbled 6.6%, while Sandisk sank 9%.
Contrastingly, SK Hynix jumped over 6.6% in pre-market trading after formal company approval for a 40 trillion won share buyback.

UK inflation rose as expected in July, up to 2.9% y/y from 2.6% in June. The energy price increase that took effect and consequential rising gas prices were the main driver. Excluding components such as energy, core inflation remained steady at 2.6%, but above expectations for a decline.

Data today: MBA Mortgage data, FOMC minutes, euro area inflation (final)