Brent tops $100 as Chinese exports suspended

Chinese refiners have suspended oil product exports for October. Domestic supply is being prioritised; with the Golden Week holiday, many people are travelling. During the 2025 eight-day holiday, China recorded ~2.25bn road passenger trips, up 6.5% y/y, supporting a seasonal gasoline demand boost. For 2026: the holiday is unusually long, with the National Day break combined with the Mid-Autumn Festival into a 13-day holiday. India’s June–September monsoon rainfall was 12.6% below normal, the weakest since 2015, as a strong El Niño suppressed rainfall. Rainfall during the Jun-Sep monsoon season was 12.6% below the long-term average, according to the India Meteorological Department. Reuters reports the US has asked Germany and France to release emergency diesel stocks. Reportedly, the EU was asked to release 120mb over six months to help ease global fuel prices, with the threat of a diesel export ban from the US if they don't. Indian refiners are now hiring tankers to transit Hormuz themselves and load crude inside the Persian Gulf, reversing their earlier risk-averse approach. Sinokor and Dynacom have been awarded tenders; SCI and Lila Global bids were cancelled. Previously, Indian refiners relied on Gulf producers/traders to take the Hormuz risk, paying a premium for delivered crude. President Zelenskyy said Ukrainian forces struck an oil facility in Russia’s Samara region, alongside a Russian vessel in the Black Sea, a drone launch/storage site in Oryol and a military supply depot in Bryansk. Finally, the Dec/Jan’26 and Dec/Jun’27 Brent futures spreads are at $3.41/bbl and $12.87/bbl, respectively.

Stronger this morning in Dated with Oct'26 DFL trading up to highs of $11.00/bbl and Nov'26 DFL up to $4.37/bbl. We saw buy side interest in rolls with 1-7 Oct/Cal Oct'26 bid and buying of $6.00/bbl-11 Nov'26 vs 26-1 Dec'26 at $2.80/bbl. Also saw buying of Nov/Dec'26 Jan'27 DFL fly with $1.00/bbl. However did see a trade seller come in on 2-6 Nov/Cal Nov'26 offering $2.07/bbl, whilst 23-27 Nov/Cal Nov'26 remained bid. 

This morning in Brent/Dubai we opened lower and traded down aggressively. The Nov'26 Brent/Dubai opened at $0.00/bbl and traded down to -$1.50/bbl, all the selling happening on screen. The whole curve moved lower, with boxes only trading slightly lower, producer and major buyside in the Nov/Dec'26 box, trade house offer-side. The window was much stronger than where the Oct/Nov'26 Dub spread was trading yesterday, and we saw only buyside interest in this spread this morning. We traded up from $5.20/bbl to $7.50/bbl, pricing around $9.00/bbl. There was continued trade house buying of Feb/Jun'27 27 boxes, trading -$0.10/bbl.

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 opened very strong, with MOC and the whole complex bid and offerless pre-window, before scale-back selling pulled prices off the highs. MOPJ firmed sharply versus last night, with Nov'26 cracks opening at $3.00/bbl and trading to $3.05/bbl before falling to around $2.20/bbl post-window; spreads rallied then eased, with Oct/Nov'26 up from $26.00/mt last night to $34.00/mt before ending at $32.00/mt, Nov/Dec'26 up from around $26.00/mt to $33.00/mt before closing at $32.00/mt, and Dec/Jan'27 at $29.00/mt. E/W gapped higher, with Oct'26 up from $68.00/mt last night to $74.00/mt, while Dec'26 traded from $65.00/mt down to $63.50/mt, the Nov/Dec'26 box narrowed from $3.00/mt to $2.50/mt and Cal 27 traded at $37.50/mt before turning illiquid. NWE naphtha followed suit, with Nov'26 cracks gapping from a -$5.25/bbl pre-window to -$4.85/bbl before ending at -$5.10/bbl and Q2'27 trading at -$8.15/bbl, while crack rolls were bid, with Nov/Dec'26 at $0.40/bbl and Q2/Q3'27’ at $.35/bbl. Spreads eased from the highs, with Oct/Nov'26 at $28.50/mt and Nov/Dec'26 at $28.00/mt post-window.

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.

US inflation looked soft: revisions pulled August core PCE to 3.0% y/y (3.3% expected) and headline to 3.4% (3.7%)….. But U.S. electricity prices are rising at their fastest pace in decades.

Europe's energy shock is hitting headline HICP: Germany 3.3%, France 3.4%, Italy 4.1%, Spain 5.0%. Energy is up 15-26% y/y for Germany, France & Italy. Australia's monthly CPI rose to 4.0%, with the trimmed mean steady at 3.6%.

China's PMI input prices hit 60.8 versus output at 54.0, squeezing margins.

Activity is strong. US nominal spending rose 0.9% on 0.2% income growth, cutting the saving rate to 4.1% from 4.6%. Households are drawing on savings, not wages.

US job openings dropped -256,000 in August, to 7.08 million, their lowest level since March. Available vacancies have now declined by -506,000 since April.

Chicago PMI hit 58.8 (51.0 expected), though Q3 GDPNow estimates fell to 3.7% from 5.0% after a $132.6bn goods trade deficit.

EUR/USD hits 18-month low, and it’s going a lot lower.

Yields on 10-year Treasuries are the highest since 2002 versus a comparable metric on the S&P 500 - the earnings yield. At a certain point, bonds will present a compelling investment proposition vs risk assets, but many investors say not yet since growth is still strong.

US bonds are not the biggest concern. France is. The German bond-market divide w/France is the widest since the 2012 Euro crisis. France now pays over 120bps more than Germany to borrow for 10yrs, almost double the premium four months ago. Political turmoil and fiscal fears are driving the countries apart. France even pays 22bps more than Italy; the biggest gap since the Euro’s launch.

The average interest rate on a 30Y Mortgage in the US rises to 7.60%, the highest level since level since November 2023, per MND.

Another equity doom chart. SPX hasn't moved in five weeks. The median stock is down 4.5%. Now credit is splitting too.

Also note in September the U.S. 10-year Treasury yield rose by 53bp. The last time there was a monthly move this big in yields was September 2022. That month, the S&P 500 fell by more than 9%.

*CCC DEBT TURNS DISTRESSED FOR FIRST TIME SINCE 2023 BANK CRISIS