Brent trades up to $104 as Iran escalates shipping attacks

Shipping attacks have and concerns about potential escalations in the Middle East have supported the bullish sentiment. Axios reported that the Pentagon ordered CENTCOM to prepare for a possible resumption of major combat operations against Iran. Iran has reportedly struck an anchored oil tanker off the coast of Qatar and Fujairah, marking two tankers struck beyond the Strait of Hormuz within 24 hours. Venezuela’s 310kb/d Cardon refinery was restarting its CDU on Wednesday following a fire that forced its shutdown earlier this week. According to a Reuters survey, oil market volatility tops the list of major risks for Japanese companies, followed by foreign exchange fluctuations. Maersk said on Thursday it was increasing its emergency fuel surcharge on all export collections and import deliveries due to the ongoing conflict in the Middle East. Isaias is set to become the first hurricane of the 2026 Atlantic season, and is expected to make landfall along the US Gulf Coast late Friday or early Saturday, threatening parts of Mississippi, Alabama and the western part of the Florida Panhandle. Brazilian state-run oil firm Petrobras won 12 exploration blocks in Campos basin in an auction held by oil regulator ANP on Wednesday, offering a total of around 2.97 billion reais ($592.14 million) in signature bonuses. Finally, the Dec/Jan’26 and Dec/Jun’27 Brent futures spreads are at $3.28/bbl and $13.29/bbl respectively.

Better bid this morning in Dated with Balmo Oct DFL trading up to $17.00/bbl on screen and bid over OTC, and Nov DFL up to $5.38/bbl. Also saw buy side interest out of Cal Oct DFL and BalOct/Nov DFL. We saw buying of 19-23 Oct v Cal Nov again and 19-23 Oct 1-week from a hedge buyer. Also saw buying of 23-27 Nov v Cal Dec at $2.00/bbl and strong Nov/Dec DFL and Dated roll buying on screen and OTC. Further down the curve saw Jan DFL buying and paper on both sides of Q1'27, however a major still offering Q1/Q2'27 DFL roll.

This morning in Brent/Dubai there was products selling of Q1 B/D, and Chinese selling of Dec through Feb B/D boxes. This meant that the Nov B/D moved lower into MOC, gapping down overnight from -$1.75/bbl to -$2/bbl and trading down to -$2.5/bbl. The boxes all sold off as well, the Dec/Jan B/D down to -$0.31/bbl. Following this selling pressure, everything rebounded back, the Nov bd back up to -$2.2/bbl, the boxes all up around $0.05/bbl individually. The Q1 remained weak, trading down from -$1/bbl to -$1.4/bbl. The window was stronger, and the Bal Oct/Nov Dubai spread traded between $6/bbl to $7/bbl, buyside interest by banks, sellside by major.

380 spreads opened considerably higher and while prompt spread came off it still remains higher than yesterdays close, Nov/Dec opened around $2.50 higher at $44.00/mt, it then traded down to $43.00/mt pre window and traded at this level in the window., Dec/Jan opened 2 dollars higher at $30.00/mt and then continued to strengthen to $31.50/mt post window. Nov 380 crack came off slightly pre window from $5.30/bbl to $5.15/bbl and then rallied up to $5.50/bbl post window, Dec 380 crack traded between $1.10/bbl and $1.20/bbl. Barge complex remained thin this morning but strengthened considerably, Nov/Dec opened a dollar higher at $22.50/mt and then traded up to $25.00/mt in only 17kt, Dec/Jan has yet to trade, Nov Barge crack opened 50c higher at -$8.10/bbl and then consistently traded at this level, Nov 380 E/W has traded down from $90.00/mt to $85.00/mt.

Liquidity picked up with the return of the Chinese this morning, Sing 0.5 saw good volume while Euro remained thin. Sing 0.5 complex weakened this morning, cracks initially traded higher due to Chinese arbers buying flat price, as the morning progressed real selling came in and Nov traded down from $25.00/bbl to $23.90/bbl pre window, during the window it continued selling off on screen to $23.30/bbl, it rallied back up to $23.85/bbl post window, Dec Sing crack traded between $21.65/bbl and $22.35/bbl. Sing spreads also weakened with Nov/Dec selling off from $32.00/mt to $31.00/mt pre window, this sell side pressure persisted into the window trading down to $29.00/mt before bouncing back up to $30.25/mt post window, Dec/Jan shed $1.50 to $27.00/mt. Euro 0.5 liquidity improved this morning but it was still relatively thin, Euro spreads traded higher with Nov/Dec getting bid up from $14.50/mt to $15.00/mt post window, Dec/Jan and Jan/Feb have yet to trade. Nov Euro crack traded up from $0.00/bbl to $0.30/bbl post window in low volume, Dec crack traded 10c higher to $0.65/bbl. 0.5 E/W continued to slip today with Nov shedding around 7 dollars to $148.25/mt.

This morning in distillates, Sing gasoil spreads saw strong buying initially, with Nov/Dec chasing up from $5 to $5.80 then selling back to $5.45/bbl. Front EW also saw buy side interest initially, trading up to -$99/mt before selling back down to -$109/mt. Regrade was well bid in the front, with Nov lifted from $2.8 to $3.50/bbl, as Nov/Dec kero was well bid at $5.25/bbl. Prompt ICE gasoil spreads rallied, with Nov/Dec trading from $42.5 up to $47.5/mt, while Dec cracks rallied from $77 up to $80.1/bbl.

It was a firmer morning in the East, with 92 MOC well bid, while the West softened through the window. In the East, Nov 92 cracks were well bid pre-window, with real buying from $26.50/bbl to $26.70/bbl, before easing to $26.40/bbl end of window on selling from real players. 92 spreads firmed, with Nov/Dec at $8.35/bbl (from $7.90/bbl) despite selling from real players, and the Nov/Dec/Jan fly at $3.60/bbl. Nov EW firmed from -$4.10/bbl to -$3.50/bbl end of window despite selling from real players all the way up. In the west, Dec RBBRs softened from $28.77/bbl to $28.00/bbl end of window, after a $28.68/bbl high pre-window, while Mar RBBRs held up better at $28.56/bbl. Nov arbs were bid back from 2.80c/gal to 3.50c/gal end of window on real buying. Nov EBOB cracks eased to $29.90/bbl into the end of the window, where real buyers stepped in, while Q1'27 cracks went the other way, trading $22.80/bbl. EBOB Nov/Dec firmed to $70–71/mt, and we saw real selling in Dec/Jan from $37.25/mt to $35.50/mt.

This morning in naphtha was strongly bid before softening at the highs, with MOC better bid spreads supported on stronger Brent. MOPJ strengthened, with Nov cracks opening at $4/bbl before pricing higher, as Dec traded from $3.10/bbl up to $3.55/bbl before falling to $3.15/bbl and then recovering, and Q1 firming from -$0.10/bbl to $0.35–0.50/bbl on backend E/W strength. Spreads were volatile but ended supported, with Nov/Dec moving from $29.75/mt last night to $35.50/mt after dipping to $33/mt mid-window, while Dec/Jan finished around $30.50/mt after reaching $32/mt. E/W was well bid, with Nov up from $68.50/mt to $72.50/mt, Q1 from $53/mt to $55/mt and Cal'27 to $40/mt, while the Nov/Dec box roofed by $2.5 to $2/mt. NWE naphtha was firmer but choppy: Nov cracks rallied from -$3.75/bbl last night to -$3.30/bbl, sold off to -$3.85/bbl and recovered to -$3.55/bbl, while Q1 was around -$5.70/bbl and Cal 27/28 at -$7.80/bbl + -$-9.95/bbl respectively. Spreads strengthened, with Nov/Dec up from $30.50/mt to $34.50/mt and Dec/Jan from $18.75/mt to $20.50/mt; crack rolls stayed firm, with Dec/Jan at $0.3/bbl, the Q2/Q3'27 at $0.8/bbl, and Cal 27’/Cal 28’ at $2/bbl.

This morning in NGLs, FEI was very strong as the Chinese came back from Golden week and crude up. Nov FEI ripped up from $883/mt at the DCE open to $913/mt by the close. Noc/Dec FEI trading at $45/mt before trading at $43/mt into the close. However, Dec/Dec FEI traded much higher at $230/mt versus $210/mt yesterday. There was also Major buying of the Nov/Dec'27 trading at -$1.5/mt. Nov FEI traded at $913/mt on screen at the close. FEI/CP was also higher with Nov FEI/CP printing $222/mt up from $211/mt pre window off the FEI strength. Nov/Dec CP traded at $24/mt down from $28/mt yesterday. Q1 FEI/MOPJs traded at -$49/mt during the window which was firm against yesterday’s levels. The arb was also weaker this morning stemming from the FEI strength. Q1 LST/FEI traded at -$324/mt down from -$314/mt yesterday. Nov LST/FEI traded at -$412/mt before falling to -$414/mt to close. This was down from -$400/mt at yesterday’s morning close.

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