Brent trades up to $102 as Houthis target Riyadh Airport

The Houthi-Saudi conflict intensified as the Houthis targeted Riyadh International Airport with at least two ballistic missiles and several drones. President Trump said that he is weighing a potential suspension of the federal gas tax of 18.4c/gal, although pausing the levy would require congressional approval. US forecasters said on Tuesday a storm forming in the Gulf of Mexico and speeding towards Louisiana and Mississippi would become the first Atlantic hurricane of 2026 within two days. Chevron said on Tuesday it was transporting non-essential personnel from its offshore platforms. Trump’s move to allow tax-free red diesel for highway trucks is unlikely to provide much near-term relief, as limited red-diesel availability, unclear tax liabilities and state restrictions are preventing many truck stops and fuel sellers from participating. Shell reported record refining margins in Q3, flagging a $42/bbl margin up from $24 in Q2, as disruption to fuel supplies from the Middle East and Russia tightened the market. The governing board of the IEA will hold an informal meeting at 13:00 local time (12:00 BST) on Wednesday to discuss a proposed release of oil and diesel stocks, two European Union diplomats said. Colombia has designated an additional 19.9 million hectares for oil and gas contracts, including 4.7 million offshore hectares, under a new government resolution, the National Hydrocarbons Agency (ANH) said on Tuesday. Finally, the Dec/Jan’26 and Dec/Jun’27 Brent futures spreads are at $2.93/bbl and $12.06/bbl respectively.

Slightly better bid this morning in dated with Balmo Oct DFL trading up to $4.15/bbl and Nov DFL up to $4.44/bbl with spreads rallying. We saw buy side interest again in back end Oct into Nov rolls with 19-23 Oct v Cal Nov trading and buying of 2-6 Nov v Cal Nov at $2.95/bbl, as well as buying of 9-11 Nov v Cal Nov. However we then saw 26-30 Oct CFD offered low at $5.6/bbl and Balmo Oct DFL eased back. We also saw a major selling aggressively on Q1 vs Q2'27 DFL down to $0.53/bbl in size. Also saw banks buying Q2'27 DFL.

A very quiet morning again in Brent/Dubai, with the only OTC interest being some Chinese selling of Dec/Jan box around -$0.15/bbl, bank vs bank on May/Jun/Jul B/D fly at $0.03/bbl, and the Balmo spread being well offered by major at $6.5/bbl after a better offered window. With no real interest, Nov B/D traded rangebound between -$1.4/bbl to -$1.2/bbl, the Dub spread tracked Brent spreads, trading between $3/bbl to $3.3/bbl.

380 had its most illiquid morning of the week, spreads were very quiet with Nov/Dec trading once at $44.00/mt representing a 75c gain from yesterday evening, Dec/Jan has yet to trade and Jan/Feb traded once at $19.00/mt. Nov Sing crack opened 20c higher at $5.70/bbl, it shed 20c in the window back down to $5.50/bbl and has traded as low as $4.90/bbl on screen post window although that was only in 1kt, Dec 380 crack has traded up from $0.95/bbl to $1.25/bbl post window. Barge complex was also extremely thin, Nov/Dec traded once at $20.00/mt, it was trading at $19.50/mt yesterday evening, Nov crack initially trading up from -$9.50/bbl to -$9.35/bbl before coming off to -$9.85/bbl post window. 380 E/W has been implied around 2 dollars higher to $94.50/mt.

Liquidity remained thinner than usual this morning, Sing 0.5% opened slightly stronger this morning but came off into the window while Euro 0.5% spreads strengthened. Nov/Dec Sing opened around 2 dollars higher at $36.00/mt, it then came under sell side pressure in the window getting offered down to $33.50/mt, Dec/Jan weakened from $29.50/mt to $29.00/mt in the window. Nov Sing crack opened at $26.10/bbl and was aggressively bid up on screen to $26.70/bbl in the early morning, it topped out here and quickly sold off to $26.25/mt pre window and this sentiment continued into the window selling down to $25.50/mt, Dec Sing crack came off 25c to $22.75/mt. Euro 0.5% was still thin but there was more buyside interest on spreads than recent days, Nov/Dec was bid up a dollar to $14.00/mt in the early morning and then traded between here and $13.50/mt, Dec/Jan opened $1.25/mt higher at $10.50/mt and traded at this level for the morning. The Euro crack has yet to trade this morning but is getting erratically bid and offered in the broker market. 0.5 E/W has been implied around 4 dollars lower to $161.75/mt.

This morning in distillates, Sing gasoil spreads were mixed on ICE volatility, strengthening overall, with Nov/Dec trading from $4.11 up to $4.65/bbl. Front EW was mainly sell side, trading from -$98 down to -$105/mt, while Q2 saw selling at -$67/mt. Regrade was quiet, with Nov trading at $1.75/bbl.

Prompt ICE gasoil spreads firmed post window, trading from $38 up to $42.5/mt, while Dec cracks rallied from $74 up to $76.5/bbl.

It was a strong morning in Gasoline, led by the west, with RBBRs and the arb pulling the complex higher. In the east, Nov 92 cracks were well bid pre-window where they traded $25.90/bbl on screen ahead of the window. 92 MOC was balanced to slightly bid, and cracks traded $26.25/bbl at the end of the window. 92 spreads were better supported, with Nov/Dec firming to $8.20/bbl and the Nov/Dec/Jan fly to $3.65/bbl, while Nov EW held at -$4.95/bbl. In the west, Dec RBBRs rallied strongly from $29.12/bbl to $31.51/bbl. Nov arbs were bid up to 7.10c/gal despite selling from real players. EBOB was strong too: Nov cracks rallied from $29.85/bbl to $31.35/bbl and we some some real buying in Jan cracks from $22.35/bbl to $22.45/bbl. The Nov/Dec crack roll strengthened to $6.3/bbl where we saw some selling and Nov/Dec spreads firmed to $72/mt.

This morning in naphtha was mixed and volatile, with MOC flat bid and spreads staying crude dependent. MOPJ cracks were firmer, with Dec up from around $2.05/bbl last night to $2.60/bbl before easing to $2.50/bbl, while Q1 traded at -$0.35/bbl; spreads were choppy, with Nov/Dec trading $29.25–30/mt before returning to $29/t and Dec/Jan moving from $28.50/mt to $27.50/mt before recovering. E/W stayed supported, with Dec rising from $67/mt last night to $68/mt and Q1 from $51.50/mt to $52.50/mt before easing to $52/mt, while the Nov/Dec box was up 25c at flat. NWE naphtha front cracks were broadly steady after an early bid, with Nov moving from -$4.35/bbl to -$4.10/bbl before returning to -$4.35/bbl, while Q1 traded up to -$6/bbl before ending at -$6.15/bbl, Cal 27' at -$8.1/bbl, and the Q1/2 roll at $2/mt. Spreads softened slightly, with Nov/Dec easing from $29.50/mt to $29/mt and Dec/Jan from $18.50/mt to $18/mt as the Dec/Jan/Feb fly was at -$4/mt.

This morning in NGLs, FEI spreads were down with Nov/Dec FEI opening at $42.5/mt before trading at $42/mt during the window and then trading at $41/mt to close. Dec/Mar FEI traded at $114/mt up from $112/mt. FEI/CP traded up from $209/mt to highs of $218/mt before falling to close around $213/mt. The Arb sold off this morning before recovering to close the window: following the choppy move in FEI. Nov LST/FEI traded down to lows of -$407/mt before recovering at the end of the window to -$400/mt. Nov FEI opened around $880/mt before peaking at $884/mt before coming back down to $882/mt. The Cal'27 LST/FEI traded at -$245/mt before printing down slightly to close around -$246/mt. There was also interest in C3 EW this morning with Nov EW trading at $160/mt, Dec EW trading at $145/mt and the Q2/Q3 strip traded at $87.5/mt. FEI/MOPJs were illiquid with Q1 FEI/MOPJ trading at -$50/mt roughly flat from last nights closing print.

S&P 500 and Nasdaq both make new all time highs, dollar strengthens, 30-year new closing high and 2’s/10s rallied again to 50bp. Trending!

S&P 500 closed at a record high. With twice as many lows as highs on the NYSE.

Good chart from Goldman on consensus Hedge Funds completely missing this recent equity rally.

France 10 year bond yield = 4.79% Greece 10 year bond yield = 4.43% Nobody who lived through the PIGS debt crisis in the early 2010s would have predicted Greece to be a better credit than France in 2026.

The price of borrowing for AI hit a new high: ~11%. JPMorgan is marketing a $5B Volta loan at that yield, funding 36,000 Nvidia GPUs and a data centre in Norway.

CITI: US LUXURY CREDIT CARD SPENDING FELL FOR THIRD CONSECUTIVE MONTH, DOWN 6% Y/Y IN SEPTEMBER