Brent supported at $105.80 as Hormuz traffic “very limited”

Iranian army chief Amir Hatami says Hormuz traffic is “very, very limited” and the Strait will remain closed until Iran’s rights are respected, claiming it is under full army and IRGC supervision. Trump ruled out using nuclear weapons against Iran and said he did not envisage deploying US ground troops, while claiming Washington is discussing denuclearisation with Russia and China. Israeli Channel 12 reports Israel believes Iran may be preparing a pre-emptive attack following “extreme military movements” inside the country. Houthi attacks on Saudi Arabia and Yemen continued, with reports of an explosion in Jazan, Saudi air defences intercepting drones, and the Houthis claiming to have downed a Saudi Wing Loong II aircraft; Yemen’s prime minister and cabinet reportedly survived a missile strike on Aden’s presidential palace. Trump criticised Ukraine’s renewed strikes on Russian oil refineries as a “disgrace”, warning they raise global oil prices, as the US-brokered energy ceasefire collapsed and both sides resumed attacks. Separately, EU Commission President Ursula von der Leyen pledged not to lift sanctions on Russia until it stops the war, as European leaders discussed Ukraine. Finally, as of the time of writing, the front-month (Dec/Jan) and 6-month (Dec/Jun’27) are at $2.77/bbl and $12.73/bbl, respectively.

The Dated complex softened again this morning, with the weakness concentrated in the prompt. Balmo DFL came off from $9.50/bbl at the open on screen to $7.00/bbl despite refiner buying at $8.00/bbl and $6.70/bbl, and has kept easing since. Nov'26 DFL slid from $3.75/bbl on screen to $3.00/bbl before rebounding towards 3.50, while Dec'26 DFL edged up from $3.09/bbl to $3.10/bbl. This drove the Nov/Dec'26 DFL roll lower from $0.25/bbl to flat despite buying, with lots now trading at -9c. Real players sold Nov/Dec'26 Dated at $2.20/bbl. In the days market, real players bought 26-30 Oct'26 v 02-06 Nov'26 at -$0.08/bbl, 16 Oct'26 v 30 Oct'26 was bought at $15.00/bbl, and the 21 v 28 Oct'26 CFD roll was bought at $6.70/bbl and has eased since. On screen, Jan/Feb'27 Brent eased from $2.28/bbl to $2.25/bbl, while Dec/Jan'27 has come off from $2.41/bbl early, leaving the front Brent fly negative around -4c now.

This morning in Brent/Dubai we gapped higher, with the Nov Brent/Dubai opening around -$1.42/bbl, up from -$1.87/bbl, and trading up to -$1.32/bbl early. We sold off into the window, trading down to -$1.83/bbl, and post window we traded rangebound around there, with a low of -$1.92/bbl, finishing around -$1.8/bbl. As we moved lower post window, we saw dated dubai buying in Nov and Dec come in which kept us range bound.The Nov Dated/Dubai came off from $2.42/bbl to $1.09/bbl. The Nov/Dec Dubai spread was choppy, dipping to $2.52/bbl before recovering to $2.81/bbl, with late buying around $2.72/bbl. The Nov/Dec box traded down from -$0.28/bbl to -$0.45/bbl.

Sing 0.5 cracks opened lower and spreads traded at similar levels to yesterday evening while Euro 0.5 was much better bid than recent mornings. Nov/Dec'26 Sing opened at $28.00/mt and has traded between this level and $28.50/mt, Dec/Jan'27 Sing is trading between $28.00/mt and $28.25/mt. Nov'26 Sing crack opened 40c lower at $25.60/bbl, it briefly traded down to $25.35/bbl before getting bid back up to $25.70/bbl by window start, it continued to rally during the window topping out at $26.20/bbl, Dec'26 Sing crack opened 40c lower and then traded up 35c to $23.95/bbl. Euro 0.5 remained very illiquid however the prompt crack was much better bid this morning, Nov/Dec'26 traded at $16.00/mt in low volume while Nov'26 crack opened higher at $1.30/bbl, it then traded up to $1.50/bbl post window and then gapped up to $2.00/bbl before retracing to $1.80/bbl.

380 spreads opened stronger again this morning before pulling back while cracks opened weaker and then rallied. Nov/Dec'26 380 quickly traded up a dollar to $60.00/mt before selling down to $59.00/mt by window start and then getting offered down on screen to $58.00/mt during the window, post window it rallied back to $59.50/mt, Dec/Jan'27 was better offered trading down from $42.00/mt to $40.00/mt. Nov'26 380 crack opened 40c lower at $13.60/bbl, it was then aggressively bid up on screen to $14.50/bbl, sold off in the window to $14.00/bbl and has bounced back up to $14.30/bbl post window. Barge spreads were extremely illiquid this morning, Nov/Dec'26 traded once at $24.25/mt, Nov'26 Barge crack saw better liquidity and was better bid trading up from -$7.00/bbl to -$6.30/bbl.

This morning in distillates, Sing gasoil spreads were decently offered in 2027, with Dec/Dec trading at $42.10/bbl and Mar/Dec well offered at $28.00/bbl. E/W sold off initially before finding support, trading down to -$150/mt before recovering to -$135/mt. Regrade remained stable in the front, with Nov trading at $1.70/bbl, while Nov/Dec kero saw some buying at $2.10/bbl.

Prompt ICE gasoil spreads sold off, trading from $46.75/mt down to $43.00/mt, while Dec cracks weakened from $83.10/bbl down to $80.70/bbl.

This morning gasoline was weak. Nov 92 cracks got sold down from $21.80/bbl to $20.90/bbl by a refiner, and Nov/Dec came off from $6.45/bbl to $5.40/bbl. Gasoline E/W softened a touch, trading down from -$3.50/bbl to -$3.75/bbl as EBOB also came off. Nov EBOB cracks got offered down from $25.90/bbl to $25/bbl, and Nov/Dec EBOB weakened from $63/mt to $60/mt with trade houses on the sell-side.

This morning in naphtha was very choppy, with MOC trading flat and lower Brent supporting front cracks, while spreads moved with crude. MOPJ cracks were firmer versus last night, with Nov'26 up from around $5.10/bbl to $5.55/bbl, Dec'26 at $4.10/bbl and Q1'27 at $1.15/bbl; spreads opened softer and traded range-bound through the window, with Nov/Dec'26 ending at $34.50/mt versus $33.50/mt last night and Dec/Jan'27 unchanged at $28.50/mt after briefly falling to $27.50/mt. E/W was mixed, with Nov'26 trading between $84.00/mt–$85.00/mt before ending at $84.00/mt versus around $85.25/mt pre-window last night, while Dec'26 was $80.00/mt and Q4'27 at $32.75/mt. NWE naphtha front cracks strengthened, with Nov'26 improving from -$4.30/bbl last night to -$3.90/bbl after opening at -$4.00/bbl, while Q1'27 was -$6.00/bbl and Q1/Q2'27 traded at $2.10/bbl; spreads were slightly firmer, with Nov/Dec'26 around $29.75/mt–$30.00/mt versus $29.50/mt last night and balmo at $30.00/mt.

Quiet morning in NGLs, FEI structure was better offered with Nov/Dec'26 FEI opening at $40.50/mt, before at $39.00/mt to close. Dec/Jan'27 FEI traded back to $37.00/mt after trading at $37.50/mt during the window. This is down from $38.00/mt at yesterday’s close. FEI/CP was up with Q1'27 FEI/CP trading at $172.00/mt compared to $176.00/mt yesterday. Nov'26 FEI/CP traded at $225.00/mt which was down from $234.00/mt yesterday. Dec'26 FEI/CP was also weaker trading at $210.00/mt and $209.00/mt down from $219.00/mt yesterday afternoon. FEI/MOPJs were illiquid but firm against yesterday’s US close. Nov'26 FEI/MOPJ printed -$12.50/mt while Q1'27 FEI/MOPJ printed -$38.00/mt. The arb was very strong this morning as FEI was weak. Nov'26 LST/FEI opened around -$385.00/mt before trading at -$381.00/mt and highs of -$380.00/mt before dropping back to -$383.00/mt. The Q1'27 arb gapped up to -$305.00/mt which was up from -$315.00/mt yesterday. Nov'26 FEI rebounded slightly into the close where it was trading at $940.00/mt on screen.

September PPI jumped 1.3% month on month, more than double expectations and the biggest rise since March 2022, taking the annual rate to 6.3%. Retail sales also beat, up 0.8%. Yet the 10-year yield fell about 10bp to 5.09% as investors rotated hard out of AI and chips into Treasuries, healthcare, defensives and value. Lower yields helped the broader market absorb the inflation shock, and stocks recovered from early losses. Chips didn’t: the Philly Semiconductor Index fell 0.88%, its eighth straight loss and the longest streak since October 2008.

Indonesian stocks plunge the most since the Asian Financial Crisis in the late 1990s.

COREWEAVE BOUNCES 5.9% AS JENSEN HUANG STEPS IN. Nvidia’s CEO came to CoreWeave’s defence in Stockholm: “CoreWeave’s strength is improving every day... Their cost of capital is actually decreasing.” He added that he sees no need for Nvidia to backstop the company. The credit market isn’t convinced: on the same day, CoreWeave’s five-year CDS hit a record. This is CRWV's 9.75% 2031 bond vs CCC bond index yield. Try raising more capital when you're trading like junk.

CTA positioning indicator for US Treasuries reached a record low ahead of the rally.

BofA positioning data shows institutional investors are doubling down on tech: 37% of global fund managers are now overweight the sector, up from 30% in September and the highest since August 2020, ahead of Pharmaceuticals (23%) and Industrials (22%), according to BofA’s survey of 161 managers overseeing $453 billion. Meanwhile, 34% are underweight Consumer Discretionary, the most bearish positioning since the 2008 Financial Crisis.

The KOSPI is already down -16.2% on the week as of Thursday's close - on pace for the biggest weekly drop since the Great Financial Crisis (week of Oct 20, 2008). Note: the KOPSI is heavily tech-weighted.

Anthropic IPO valuation expectations fall to $1.5T from $2T.

FWIW The day before the Iran war, the 10-year Treasury was 3.96% and falling. Today it's 5.08%.!