Brent trades around $73/bbl, US and Iran agree to halt attacks

The Sep’26 Brent crude futures saw a rangebound performance so far on Monday morning, trading around the $73/bbl handle as prices remain at pre-war levels. The US and Iran have agreed to halt attacks against each other after reciprocal attacks over the weekend, a US official said on Sunday. A diplomat briefed on the matter said negotiations would resume in Doha on Tuesday. This follows Iran’s cancellation of its participation in technical talks that was slated for Sunday. Following the weekend attacks on shipping, commercial traffic through the Strait of Hormuz persisted at a reduced level, although levels were still higher than for most of the war. Russian President Vladimir Putin acknowledged on Sunday that fuel supply problems had created shortages in Russian regions and a task force was working on ensuring sufficient quantities were provided throughout the country. Ukraine hit two Russian oil refineries in the regions of Krasnodar and Yaroslavl overnight, President Volodymyr Zelenskiy said ‌on Sunday. Finally, the Aug/Sep’26 and Aug/Feb’27 Brent futures spreads are at -$0.64 and $0.57/bbl respectively.

Slow start to Dated. Jul/Aug DFL traded smalls at -$0.52/bbl, with the Dated trading equivalently at -$0.46/bbl. 27-31 Jul v Cal Aug saw buyside interest from refiner, whilst there was sellside interest in 3-7 Aug v Cal Aug. These were legged together, seeing the 27-31 Jul 1-week roll trade -$0.05/bbl. Aug DFL saw a touch of buying, printing up to $0.34/bbl.

This morning was very quiet in Brent/Dubai. The July bd opened lower at $5.8/bbl and traded rangebound between $5.7/bbl to $5.93/bbl. There was some buying of Sep B/D around $3.68/bbl, and the Q4 was well offered around $2.5/bbl. The Dubai spreads were very quiet, up a touch over the weekend. The Jul/Aug traded between -$1.05/bbl to -$0.99/bbl. The boxes were very quiet, some sellside interest in Aug/Sep around $1.12/bbl with nothing trading.

380 spreads were bid to start the week. However buying was not super aggressive. We saw the Jul/Aug 380 trade up to $1.25/mt from $0.50/mt before selling back down to $0.75/mt post window. The 380 E/W was well supported this morning, the Jul 380 E/W briefly touched $22.75/mt, up from Fridays level of $20.75/mt, before coming off post window back down to $21.00/mt. Barges were a touch weaker with the barge crack trading down to -$9.60/bbl on thin liquidity while Jul/Aug barges closed the morning at -$2.00/mt.

Sing 0.5 enjoyed a stronger start to the week, with buy side interest down the curve. Sing spreads started the buying trend with Jul/Aug up to $22.50/mt fairly quickly from overnight levels of $20.25/mt. However post window selling came in on spreads, with Jul/Aug closing the morning at $21.75/mt. The crack benefitted from some buying, with Jul trading up to $16.80/bbl from $15.55/bbl. Euro 0.5 was stronger off the back of Sing 0.5 buying, with the Jul Euro crack up to $8.70/bbl and Jul/Aug Euro up to $21.75/mt.

This morning in distillates, Sing gasoil spreads were mixed overall, with July/August sell side interest and July/Dec buying at $12.40/bbl. Front EW sold off initially, trading down to -$51/mt, before firming to -$48/mt post-window. Regrade saw selling in Q4, trading from $1.40/bbl down to $1.20/bbl, while kero spreads were offered.

Prompt ICE gasoil spreads opened higher before selling off, with Sep/Dec moving from $70.0 down to $66.0/mt, while cracks sold down to $45.6/bbl in August. Heating oil spreads weakened, while HOGOs were rangebound, with the July HOGO swap trading at 31.8c/gal.

This morning in gasoline, flat price traded end window at $95.60/bbl with MOC better bid. Gasoline opened stronger, with 92 cracks seeing buyside interest at $22.30/bbl, and Q3'27 was trading at $7.50/bbl. Spreads were mixed, with Jul/Aug trading at $4.80/bbl, and East/West came off from -$10/bbl to -$10.75/bbl as EBOB went better bid. July EBOB cracks traded up to $33/bbl where they found selling, and Jul/Aug was bid at $36.50/mt.

This morning in Napthta, MOC better bid with phys playing lifting +5c in July and Aug MOC. EW pricing up with real players lifting $28/mt on July EW, with trade sell side of the July/Aug EW box – seeing selling at -$4.5/mt and -$5/mt this morning. Petchem players buyside of July MOPJ flat price with cracks in Europe and spreads also better bid this morning, seeing July Europe cracking trading -$3.3/bbl end of window with selling in Aug Europe crack at -$5.3/bbl.

This morning in NGLs Q4 FEI flat price buying was the biggest driver with importer and Euro trade buying $554/mt. Spreads initially found buying with Q3/Q4 going $4/mt before the front went offered and the spreads got sold into with the Q4 still having buying. Jul/Aug was supported, trading around $15.50/mt for most of the morning. FEI flat price traded end window at $570/mt with two-way interest while the Jul arb had buyside interest trading -$195/mt. CP was quiet trading $576/mt in Jul a couple of times with Sep FEI/CP trading $54/mt and Q4 trading $49/mt. Europe was similarly quiet with buyside interest on the Aug pronap and Aug Euro arb.

* Crowded Trades. Fragile Fundamentals. Dangerous Combination.

* Sentiment has swung hard toward fear. The Fear & Greed Index has collapsed to 24.8 - below the 30-point "Extreme Fear" threshold - even as the S&P 500 sits just 3.7% off its all-time high. The 5-day put-to-call ratio has surged to 0.84, the highest since April, signaling investors are rushing for protection. Meanwhile, margin debt as a share of M2 has blown past its 2007 peak and is closing in on the 2000 high.

* The most glaring extreme is in rates markets. Leveraged fund short positions in SOFR futures hit a fresh record of 2.97 million contracts - over $700 billion notional - more than doubling in just two months. The bet: rates stay higher for longer. But with energy prices now softening and inflation expectations collapsing, this crowded short is increasingly vulnerable to a violent unwind.

* On the dollar, COT data shows USD longs at a seven-year high - another extreme that cuts both ways. A reversal here would ripple across commodities, EM, and rates simultaneously.

* The macro backdrop isn't flashing red, but the risks are multiplying. Atlanta Fed's GDPNow has Q2 GDP tracking at 2.5%, and business investment remains supported by AI capex and corporate tax cuts. But the consumer is fraying - real disposable income is falling at a rate rarely seen outside recessions, the savings rate is near historic lows, and spending growth is decelerating. With consumers driving over two-thirds of GDP versus less than one-seventh from business investment, that math matters.

* In commodities, managed money has been heavy sellers for five consecutive weeks, led by agriculture. (Chart 4: Bloomberg, Saxo) Tech sector capex continues to crowd out commodity capex, a structural headwind for future supply. Yet physical markets are quietly tightening: copper inventories at the LME and SHFE fell a combined 23.8kt last week, with the recent price weakness attributed more to macro-driven long liquidation than any deterioration in fundamentals. COMEX inventories, now at a record 601kt, reflect tariff-driven accumulation rather than true demand....

* Elsewhere, China imported 163 tons of gold in May - the most since March 2024 - buying the dip aggressively. Japan recorded its largest-ever single drawdown in crude oil inventories. And U.S. inflation expectations are collapsing even as SOFR shorts price in the opposite.

* Key data this week includes: China PMIs & US consumer confidence (Tue), US ADP payrolls & ISM Manufacturing (Wed) and US payrolls (Thur).

* The setup: crowded trades everywhere, a consumer under pressure, and physical commodity markets quietly diverging from paper. Markets don't usually break because everyone is wrong. They break because too many people are positioned the same way.