Brent Tumbles As Democrats Take Congress

In the news, a Democratic Congress could limit US military spending in the Middle East and make a peace deal more likely. US President Trump has conceded that the Iran war contributed to his party's heavy losses, stating that Washington has no immediate plans to hit Iran. Iran's Supreme Leader, Ayatollah Mojtaba Khamenei, has said in a written statement that US hostility will continue whichever party is in power. Meanwhile, Yemen's Houthis said they targeted Riyadh's King Khalid International Airport, which Saudi authorities have not confirmed. Elsewhere, the US Energy Department said today that it will loan 300kb of fuel oil to four companies from the emergency heating oil reserve, aiming to temper surging prices ahead of winter. The loan, nearly a third of the 1mb reserve, follows bipartisan pressure from senators to release heating oil, as diesel from the same refining stream hit records above $6.50/gal on Middle East disruption from the Iran war. In other news, India's Mangalore Refinery and Petrochemicals (MRPL) is buying more crude on a delivered basis to reduce its exposure to Iran war shipping risks and cut freight costs, its head of finance said today. MRPL CFO Devendra Kumar said that the refiner will keep insisting on delivered-at-port cargoes to de-risk, but will judge purchases purely on delivered economics once conditions stabilise. Finally, as of the time of writing, the front-month (Jan/Feb’27) and 6-month (Jan/Jul’27) Brent futures contracts are at $2.24/bbl and $10.40/bbl, respectively.

Volatile afternoon, with the Dated complex extending the sell-off and the weakness concentrated in the prompt. Balmo DFL spiked from $0.10/bbl to $0.80/bbl, with size going through at $0.25/bbl and buying at $0.45/bbl on the way up and refiners selling the high. It came back to flat at the end of the window and -$0.05/bbl after, where buying showed again. Dec DFL firmed from $3.40/bbl to $3.70/bbl before coming off to $3.15/bbl at the end of the window and $2.95/bbl late, with selling at $3.35/bbl and $2.95/bbl. Balmo/Dec DFL traded -$3.00/bbl in size, and Dec/Jan DFL slid from $0.29/bbl to $0.10/bbl. Dec Dated sank from $102.70/bbl to $94.75/bbl.

The physical window was well offered, with a US major and a tradehouse showing Forties cargoes along the curve and majors offering Oseberg and Midland, and differentials dropped around $2. The 16-20 Nov CFD followed, from $0.60/bbl to -$0.05/bbl through the window.

In the days market, 16-20 v 23-27 Nov eased from a -$0.73/bbl high, where size went through, to -$0.85/bbl despite real buying. 30 Nov-04 Dec v Dec slipped from $0.85/bl to $0.60/bbl through buying, $0.60/bbl at the end of the window, and has kept easing since. Also saw 07-11 Dec v Dec offered lower from $0.40/bbl, where 1k lots went through, to $0.30/bbl, with selling at $0.35/bbl and $0.30/bbl at the end of the window.

This afternoon in Brent/Dubai we traded in a tight range, the Dec'26 Brent/Dubai between -$0.97/bbl to -$0.74/bbl, finishing around -$0.81/bbl. There was repeated buying of Dec'26 Dub vs Feb'27 ICE Brent cross month by a Chinese player. Later on there was tradehouse selling of Dec'26 Brent/Dubai at -$0.80/bbl in size. The Q1'27 was bid in size by refiner, trading -$1.00/bbl. The Dubai spreads were better offered, the Dec/Jan'27 Dubai spread trading down from $2.00/bbl to $1.84/bbl, with major selling of the Dec/Jan'27/Feb'27 Dubai fly. The boxes were bid, with refiner buying of Jan/Feb'27 box around $0.05/bbl.

Real selling continued on Sing 0.5 into the afternoon though it was not as aggressive while Euro 0.5 continued to show resilience. Dec/Jan'27 traded around $25.00/mt until it turned better offered in the window and traded down to $22.50/mt, Jan/Feb'27 came off from $21.50/mt to $19.00/mt. Dec'26 Sing crack was offered down on screen from $16.20/bbl to $15.25/bbl by window open and then continued to sell off to $14.40/bbl during and after the window, Dec'26 0.5 E/W traded down from $103.00/mt to $96.00/mt. Euro 0.5 spreads remained illiquid, Dec/Jan'27 was better bid trading up from $15.00/mt to $17.50/mt, Dec'26 Euro crack was range-bound trading between -$0.20/bbl and $0.00/bbl.

The 380 complex saw aggressive real selling this afternoon, Dec'26 380 crack was consistently gapping lower and could not find any support, it traded down from -$1.50/bbl to -$2.75/bbl by window start and then to -$3.90/bbl by window end. 380 spreads also gapped lower with Dec/Jan'27 trading down from $31.00/bbl to $20.00/bbl and Jan/Feb'27 from $16.00/bbl to $12.00/bbl, Dec'26 380 E/W saw real selling all afternoon getting offered down from $25.00/mt to $60.00/mt. Barge spreads continued to see illiquidity but were better offered, Dec/Jan'27 traded down from $9.50/mt to $8.25/mt and Jan/Feb'27 from $7.00/mt to $5.75/mt, Dec'26 Barge crack saw better liquidity and was offered down from -$13.70/bbl to -$14.30/bbl.

This afternoon in distillates, Sing gasoil spreads were scale back bid on lower ICE gasoil, with Dec/Jan'27 trading from $3.55/bbl down to $3.30/bbl hit on screen. E/W was better bid across the curve, with Dec'26 trading from -$100.00/mt up to -$87.25/mt, while Q3'27 buying stepped up to -$50.00/mt. Front regrade was mixed, trading range-bound between $0.30/bbl and $0.60/bbl in Dec'26.

Prompt ICE gasoil spreads sold off, with Dec/Jan'27 trading from $43.00/mt down to $37.00/mt, while Jan'27 futures cracks weakened from $72.00/bbl down to $68.50/bbl. European jet diffs also weakened, with Dec'26 hit down to $94.00/mt and Q1'27 trading down to $117.50/mt.

This afternoon in gasoline, MOC was better offered with Dec EBOB crack getting lifted $12.50/bbl end of window. Dec/Jan finds some buying from a small trade at $8/mt and $8.25/mt, but then interest flips to better offered, trading down to lows of $6.25/mt on the crude drop but selling at $7.25/mt before crude sold off. Buying in June/July/Aug fly today seeing -$0.50/mt and $0/mt and getting lifted. March/April/May fly going offered at -$38/mt from a trade.

This afternoon in naphtha, MOC was offered, with crack buying and aggressive spread selling on lower crude in window. NWE Dec'26 cracks strengthened from -$4.85/bbl this morning to -$4.20/bbl post-window, while Q1'27 firmed to -$5.45/bbl; Dec/Jan'27 roll traded around $0.35/bbl on legs, Cal 27’ saw selling at -$7.60/bbl and Q2/Q3'27 priced up to $1.02/bbl on screen. Spreads weakened with Brent, with Dec/Jan'27 down to $20.00/mt and Bal/Dec'26 at $36.00/mt, while the rest was illiquid in-window. E/W weakened across the structure after backend bids were taken out, with Dec'26 down from $70.00/mt this morning to $64.00/mt, Q1'27 from $54.50/mt to $51.50/mt and Q1/Q2'27 at $11.00/mt. MOPJ cracks were illiquid and came off aggressively into the window, with Q1'27 falling from $0.90/bbl pre-window to around $0.35/bbl and Dec'26 from $3.30/bbl to $2.85/bbl on a flat-price basis; spreads softened further, with Dec/Jan'27 down from $30.00/mt this morning to $27.00/mt and Dec/Dec'26 trading at $200.00/mt.

This afternoon in NGLs, flat price was weak across the board as crude dumped. FEI structure was weak in line with this Dec/Jan'27 FEI sold down to $53.00/mt from $57.00/mt around midday. Dec/Dec'26 FEI sold all the way down to $295.00/mt from $320.00/mt earlier this morning as the front was super offered.

FEI/MOPJs were still strong throughout this afternoon, as MOPJ was more sensitive to the crude moves. Q1'27 FEI/MOPJ printed at -$14.00/mt to end the European window and Dec'26 FEI/MOPJ traded at $34.00/mt which was weaker than the morning highs of $42.00/mt.

LST spreads also sold off this afternoon. Q2/Q3'27 LST opened at 4.25c/gal before weakening to 4.00c/gal. Dec/Jan'27 also saw weakening to 2.25c/gal from 2.625c/gal this afternoon. The Arb was stronger this afternoon with Dec'26 LST/FEI printing -$330.00/mt implied up from trading -$354.00/mt around midday. Q1'27 LST/FEI only strengthened slightly from -$276.00/mt to -$274.00/mt as FEI was weaker relative to LST on the crude moves.

Butane was also much weaker today. Dec/Jan'27 butane weakened to 11.00c/gal after opening at 12.125c/gal and Feb/Mar'27 butane saw real buying at 16.125c/gal levels. There was continued importer buying of the Jan/Mar'27 Butane MOPJ cross at -$64.00/mt and -$65.00/mt which was much more expensive vs levels yesterday around -$70.00/mt.

There was real interest in buying the C4/C3 all ENT at around 65.00c/gal before C4/C3 ENT/LST printed 59.125c/gal to close, much weaker.