Brent trades lower on optimism over Iran-Oman talks to reopen Hormuz

Talks between Iran and Oman revived hopes of a Strait of Hormuz reopening, having advanced a joint proposal for a temporary shipping corridor, with inbound traffic using Iranian waters and outbound traffic following an Oman-supervised route. Meanwhile, US Secretary of State Marco Rubio has told several foreign counterparts around the world that Washington does not expect to carry out new offensive strikes against Iran, shifting its focus towards economic pressure and securing the Strait. Indian refiners are reducing Russian crude purchases, with imports expected to fall to around 2.0mb/d from 2.8mb/d in July, as Ukrainian attacks disrupt Russian flows and prompt IOC, HPCL and MRPL to seek alternative barrels from West Africa, the Americas and the Persian Gulf. Indian refiners and a major global energy company plan to avoid Iran-blacklisted vessels, including for ship-to-ship transfers, amid fears of fines, detention or cargo seizure, while other industry players are reassessing operations and may shift to alternative ships, routes and transfer locations. SK Gas paid a record $5.3 million for a Panama Canal transit slot as Iran-war-related trade disruptions, long waits and potential drought-driven restrictions sharply increased demand for passage. Finally, the Oct/Nov’26 and Oct/Apr’27 Brent futures spreads are at $0.92/bbl and $7.15/bbl respectively.

Quiet morning in Dated with more sell side flow again. Sep DFL traded down to $1.1/bbl with Sep Oct DFL trading down to -$0.5/bbl and Oct Nov dtd down to $1.55/bbl. We sell refiner sell side interest in 26-2 Sep cal Sep and 7-11 Sep 2w trade at flat. We saw selling of Nov DFL offered down to $1.61/bbl as well as a major selling Q1 27 DFL down aggressively to $0.91/bbl and a fund offering Q227 DFL.

This morning in Brent/Dubai we saw a weaker window and a rally in B/D, the Sep B/D up from $2.6/bbl to $3.45/bbl at the end of the window. We subsequently came off and traded rangebound following this. There was Chinese selling of Oct B/D and Dec ICE vs Oct Dub cross month. All Dubai spreads except for Sep/Oct traded much weaker, their respective boxes up a lot on the day. The Oct/Nov box traded up from -$0.16/bbl to highs of $0.1/bbl. However the Sep/Oct Dub spread traded much stronger, in a tight range between $3.7/bbl to $3.85/bbl, recovering most of yesterdays move lower overnight. This meant the Sep/Oct box continued to sell off during the day, down from -$1.6/bbl last night to -$2.2/bbl.

380 spreads opened lower this morning on lower crude with Sep/Oct bottoming out at $33.75/mt, real buying then came in and Sep/Oct strengthened to $34.75 by window end, this strength continued post window and it last traded at $35.25/mt. Sep 380 crack was also bid up from -$0.80/bbl to -$0.20/bbl. Barges opened slightly stronger this morning from last nights close, this continued into the window with Sep/Oct trading up from $9.75/mt to $10.25/mt. Sep Barge crack trade much higher this morning from -$10.90/bbl to -$10.05/bbl. The 380 E/W opened much lower and continued to trade lower as the morning progressed, it is currently trading at $62.50/mt down from around $69.00/mt yesterday evening.

Sing 0.5 initially opened weaker this morning on lower crude before spreads and cracks encountered real buying, Sep/Oct Sing traded down to $30.00/mt in the early morning before it was aggressively bid up to $31.50/mt during the window, it has bounced up to $32.00/mt post window. Similarly, Sep Sing cracks initially traded lower at $18.35/bbl, before being bid up to $18.80/bbl by the end of the window, this strength continued post-window trading up as high as $19.20/bbl. There was limited liquidity on Euro 0.5 this morning, Sep/Oct traded slightly higher at $22.50/mt while the Sep crack gained 30c trading up to $7.00/bbl post window

This morning in distillates, Sing gasoil spreads were better bid before coming off with ICE, with Oct/Nov trading from $4.78 down to $4.3/bbl last. Front EW sold off into end window, trading from -$85 down to -$88.5 hit, before rebounding to -$86.5/mt last. Dec regrade was hit down to $2.0/bbl, while Sep/Oct kero traded down to $1.3/bbl. Prompt ICE gasoil spreads sold off, with Sep/Dec from $119 to $112.5/mt, while the Oct crack sold down to $67.7/bbl.

This morning in Gasoline, 92 MOC better bid. EW stronger this morning with Majors and trade buyside of Sep/Oct 92, which rallies up to $5.05/bbl post window – with the EW rallying in the prompt seeing -$18.5/bbl getting lifted on screen, compared to yesterday's close of -$20.2/bbl. Buying in Q4 EW emerging this morning also, seeing buying up to -$6/bbl. EBOB also somewhat supported this morning seeing buying in Sep crack up to $39/bbl.

This morning in naphtha was firmer overall, with MOC better bid and cracks moving higher despite Europe spreads being offered in the window. MOPJ cracks strengthened, with Sep bid at $1.4/bbl bid and Q4'26 moving from $0.10/bbl to $0.30/bbl, while spreads were supported but choppy, with Sep/Oct moving from $24/mt to $25/mt before easing to $24.5/mt and Oct/Nov moving from $22/mt to $22.5/mt. E/W rallied strongly, with Sep up from $54/mt last night to $58.5/mt before coming off slightly post-window to $57/mt, while Q4'26 was around $48/mt and Q1'27 around $37.75/mt. NWE naphtha cracks followed the firmer tone, with Sep moving from -$4.45/bbl to -$3.85/bbl and Q1'27 from -$6.40/bbl to -$6.30/bbl, while spreads were weaker in the front, with Sep/Oct firm at $17/mt from $18.75/mt last night, while Oct/Nov was around $20.75/mt and Nov/Dec at $17.5/mt.

This morning in NGLs, Sep/Oct opened trading at $34/mt where it traded across the morning, softening to $33/mt briefly during end window. Oct/Nov FEI traded up from $22.5/mt to $23/mt, $1 weaker than yesterday’s closing level. There was Asian trade house on the buyside of Sep LST/CP at -$239/mt, that softened to close at -$241.5/mt as CP flat price drifted up across the morning in the front. Buyside interest in FEI/CP in Sep and Oct, trading at $119/mt and $113/mt, with Sep down from last night’s close of $133/mt. Q4 FEI/MOPJ was sold at -$61.5/mt, where it came to settle end window, having printed as high as -$58/mt on the day. End window on screen, Sep FEI flat price was lifted at both $725/mt and $726/mt.

Bond pressures ease with 30-year 7bp lower on the day and looking to have formed a short term top. The bond markets will now focus intently on Fed chairman Warsh’s Jackson Hole speech on Friday.

Free markets! LOL….. The Fed owns more than HALF of Treasuries maturing in 10–15 years.
Of the roughly $1.03 trillion outstanding in this maturity bucket, the Federal Reserve holds around $540 billion. The Fed still owns roughly $1.6 trillion of Treasuries with 10+ years to maturity.

That means a massive amount of duration remains outside private investors’ hands. But as the Fed’s portfolio gradually shrinks, someone else must absorb that supply. And unlike the Fed, private investors care about price. So the key question isn’t just how much debt Washington will issue. It’s who will buy it - and at what yield?

Delta's CEO said AI will boost profits by 50% by setting a different ticket price for every passenger in real time. The airline uses an AI system called Fetcherr that generates a unique price for each shopping request…… Walmart is now looking onto this aswell…. Inflationary.

Uranium is breaking out of a five-month consolidation as UBS warns the market is structurally tightening - with data centre power demand emerging as a key long-term catalyst.

Rice prices have SURGED by over 45% in the past 6 months.
Nvidia finally bounces after 7 straight down days. Earnings report is next week.

Australian inflation comes in significantly hotter than expected: Headline: 3.5% YoY vs 3.3% exp. RBA September rate hike pricing now at 36% from 12% yesterday, as their housing market is already falling hard.