Brent supported at $108.15 with new Russian tariffs waived

There have been reports of a significant Houthi attack on Al-Alam camp, where 700 people were enrolled in training under Saudi commanders. This weekend, President Trump signed an executive order on 16 Oct waiving the new Russia sanctions and 500% tariffs under the Lindsey Graham Act for 60 days, just two days before they were due to take effect, citing US national interests. Existing sanctions imposed under earlier executive orders remain in place. Ukrainian drones struck oil infrastructure in St. Petersburg on 18 Oct, in a major assault that reportedly targeted a key oil export terminal and other critical infrastructure. Trump took to Truth Social and said that Zelenskyy doesn't want the war to end. UKMTO reported two tanker attacks northeast of Al Jubayl, Saudi Arabia, on 16 October: one vessel was struck by an unidentified projectile, and its crew evacuated, while another was hit by a rocket-propelled grenade fired from a small boat, damaging the vessel but leaving its crew safe. A further incident was reported on 18 Oct, when two unidentified projectiles struck a tugboat northeast of Khor Fakkan, UAE, causing vessel damage and one minor injury. The UKMTO wrote in its weekly report that it is likely unable to accurately report the true number of attacks, as most vessels attacked refuse to report to the UKMTO. The Houthis released footage they claim shows a surface-to-air missile bringing down a Saudi AH-6i helicopter over Najran on 17 Oct; Saudi authorities confirmed the crash and the deaths of both crew members but attributed the incident to a technical malfunction. Finally, as of the time of writing, the front-month (Dec/Jan) and 6-month (Dec/Jun’27) are at $2.95/bbl and $13.44/bbl, respectively.

Very quiet start this morning, with the Dated complex opening weaker. We saw Nov Dated trading down to $108.60/bbl early as DFL sold off sharply at the open. Nov DFL opened at $4.24/bbl, well below Friday’s close, and has since recovered to $4.60/bbl, with Dec DFL climbing from $3.90/bbl to $4.10/bbl. Dubai held up better: Dec Dated/Dubai traded down to $2.40/bbl, around 50c under Friday’s close, before bouncing to $2.55/bbl, Oct/Nov Dated eased from $11.35/bbl to $10.85/bbl, while further down the curve Q1 27 DFL traded up to $2.62/bbl in size.

In the days market, real players bought 02-06 v 09-13 Nov at $0.80/bbl, while 05-06 v 12-13 Nov was sold at the same level. Oct v 26-30 Oct was bought at $9.85/bbl. 02-04 v 07-09 Dec was bought at -$0.03/bbl and 09-11 v 14-16 Dec sold at flat, both firming since.

Sing 0.5 came off this morning with both spreads and cracks weakening; Euro 0.5 also weakened with liquidity remaining thin. Nov/Dec'26 Sing opened at $32.50/mt and sold off to $31.00/mt pre window, it then consistently traded at this level during and after the window, Dec/Jan'27 weakened from $30.50/mt to $29.25/mt. Nov'26 Sing crack saw good volume this morning, it opened around $26.50/bbl and was quickly offered down on screen, opening the window at $25.40/bbl and then continued to weaken post window to $24.75/bbl. Euro 0.5 complex remained very illiquid this morning, there has been little spoken of spreads while Nov'26 crack weakened 50c to $1.50/bbl post window, Nov'26 0.5 E/W is implied around $10.00/mt lower than Friday evening at $148.00/mt.

After a very strong week, 380 complex saw real selling this morning, Nov/Dec'26 380 opened at $59.00/mt and traded up to $59.50/mt in the window before real sell side interest came in, it closed the window at $58.50/mt and then lacked any support post window trading down to $56.25/mt, Dec/Jan'27 shed a dollar to $39.00/mt. Nov'26 380 crack similarly traded slightly higher in the early morning before selling off quite aggressively, it traded up 30c to $13.40/bbl at the start of the window before getting offered down to $1.80/bbl post window, Dec'26 380 crack traded down from $6.80/bbl to $5.90/bbl in small size. Illiquidity in the Barge complex continued this morning, Nov/Dec'26 sold off from $22.50/mt to $21.50/mt post window while Nov'26 crack was range-bound trading between -$7.70/bbl and -$7.40/bbl, Nov'26 380 E/W has traded down from $130.50/mt to $123.00/mt.

This morning in distillates, Sing gasoil spreads were mixed overall, moving higher alongside ICE, with Dec/Jan'27 trading from $3.95/bbl up to $4.20/bbl lifted. Front E/W opened lower at -$124.00/mt before selling off to -$132.00/mt hit last in Nov'26. Regrade was also offered in the front, with Nov'26 hit down to $0.88/bbl, while Dec'26 was hit to lows of $2.50/bbl on screen. Prompt ICE gasoil spreads rallied post window, with Nov/Dec'26 firming from $42.50/mt up to $45.75/mt, while Dec'26 cracks rallied from $77.00/bbl to $79.50/bbl.

Quiet morning in Gasoline. MOC better bid this morning. Nov 92 crack weaker on the back on thin liquidity, seeing Nov 92 crack trading $19/bbl end of window with E/W valued -$3.50/bbl in Nov. Buying interest in Q1 E/W -$3/bbl with bank sell side of Q1 EBOB crack at $19.70/bbl and $19.65/bbl, with Nov/Dec EBOB better offered post Sing window, with selling stepping down to $52/mt.

This morning in naphtha was quiet, with MOC flat choice after early petchem selling in the Nov'26–Jan'27 region, while weaker Brent spreads initially pressured the front before they rebid post-window. MOPJ cracks were broadly steady to firmer versus Friday close: Nov'26 moved from around $4.30/bbl to $4.50/bbl on a flat-price basis, while Dec'26 traded at $3.40/bbl–$3.45/bbl; spreads strengthened, with Nov/Dec'26 up from $33.00/mt at close to $36.00/mt and Dec/Jan'27 from around $29.00/mt to $31.00/mt, while balmo was $30.00/mt. E/W was offered in the front but better bid in the backend, with Nov'26 down from $79.50/mt to $76.50/mt, Dec'26 from $76.00/mt to $74.00/mt and Q1'27 at $58.25/mt, pushing front boxes lower. NWE naphtha was firmer on cracks, with Nov'26 improving from -$4.40/bbl to -$4.10/bbl and Q1'27 from -$6.10/bbl to -$5.90/bbl; spreads were illiquid but firmer in the front, with the Nov/Dec'26 crack roll around $0.85/bbl.

A quiet Monday in NGLs, FEI structure slightly soft in the morning before rallying on MOC. Dec/Jan'27 FEI traded at $38.00/mt pre-Asian window, traded at $37.50/mt before recovering to $38.00/mt. Nov/Dec'26 FEI traded at $39.00/mt before trading at $40.00/mt to close. There was MM and Trades buying of flat price FEI on screen to close. Nov'26 FEI traded at $957.00/mt on screen to close. Nov'26 FEI/CP traded at $230.00/mt pre window before trading at $229.00/mt to close. This is slightly up over the weekend as a function of higher FEI flat price. Nov/Dc CP traded at $18.00/mt and Dec/Jan'27 CP traded at $20.00/mt. FEI/MOPJs were firm this morning with the Q1'27 FEI/MOPJ holding its print around -$$42.00/mt, last week’s highs. The Dec/Jan'27 FEI/MOPJ box saw Chinese selling trading at $7.00/mt and $6.50/mt throughout the morning. The Arb was illiquid with Nov'26 LST/FEI trading at -$378.00/mt pre window before trading at -$380.00/mt to close. There was some trading in the C4 CP today with C3/C4 CP going at an implied -$55.00/mt and Nov'26 C4 CP trading at $777.00/mt before printing $783.00/mt to close.

After a large sell off on Friday (Nasdaq -2.5%, S&P -1.1%) equities are bouncing this morning on the Trump back down on Russia energy sanctions. Meanwhile US bond yields and the dollar continue to fall confirming a medium-term peak is in place.

More bullish bonds, bearish stocks calls: BlackRock upgraded U.S. Treasuries and downgraded U.S. stocks.

THE "SAFE" END OF THE AI TRADE IS CRACKING. The AI bond selloff has moved up the quality ladder. It is no longer just the neoclouds. Meta's Hyperion: ~91c Hut 8's Nvidia-leased Texas site: ~91-92c Microsoft-leased Project Excalibur: below 87c These were sold as the low-risk way to own the AI buildout. Blue-chip tenants, long leases, investment-grade paper. The market is now repricing them like the risky end. For context, CoreWeave bonds are already below 80c, a level usually read as distressed.

China's Q3 GDP grew 4.5% y/y, just ahead of the 4.4% consensus and up from 4.3% in Q2. The headline looks fine. The mix underneath does not. Industrial output: +5.5% y/y (Sept) Retail sales: +1.1% y/y (Sept) Fixed investment: -7.2% y/y (Jan-Sept) Property investment: -20.6% y/y (Jan-Sept) Retail sales did beat forecasts and grew at their fastest pace since March. But 1.1% consumer growth next to 5.5% factory growth is still a wide gap. China continues to produce far more than its domestic economy can absorb.

A big source of comfort for equity traders has been the solid credit market. But that's been eroding in the past few weeks as corporate bond yields creep higher, particularly among weak companies. Yields on the lowest-rated bonds are now the highest since 2022.

China moves to Prop Up Stocks With Selling Curbs, Buybacks

Deutsche Bank says CoreWeave will need more capital, with $45B capex vs $10B cash flow…..meanwhile its DEFAULT RISK is exploding higher: CoreWeave, , 5-year credit default swap (CDS) spread surged as much as +74.5 basis points on Thursday, to a record 1,194.5 basis points, implying a more than 60% probability of default within 5 years.

KEY DATA THIS WEEK
Tuesday - September Pending Home Sales - SpaceX ($SPCX) earnings, after the close Wednesday - Tesla ($TSLA) and Meta ($META) earnings, after the close
Thursday - Initial Jobless Claims
Friday - October University of Michigan Consumer Sentiment - October University of Michigan Inflation Expectations
Around 70 S&P 500 companies, roughly 14% of the index, report this week.