Brent Volatile On Escalation And De-escalation Headlines

This morning the Sep’26 Brent crude futures opened higher above $90/bbl, reaching highs of $91.08/bbl before falling below $88/bbl following the European market open, filling the gap between today’s open and Friday’s close. Prices initially opened higher on further escalation between Iran and the US before easing as Iran said diplomatic exchanges with the US are ongoing via mediators. In the news, China's exports of fuel oil, mainly for marine fuel bunkering, climbed 55% m/m in June to 577kb/d, customs data showed on Monday, reaching the highest in 2026 so far. After a brief resumption, the Caspian Pipeline Consortium (CPC), which exports oil mainly from Kazakhstan, said on Monday that it has again suspended loadings after a brief resumption, following a new Ukrainian drone attack on a tanker. US gasoline prices climbed back above the $4/gal mark on Middle East conflict escalation, according to the AAA, after hovering below for a month. Andy Burnham will stick to Labour’s ban on new exploration licences in the North Sea, dashing oil and gas industry hopes for a radical change in government policy towards fossil fuels. Finally, the Sep/Oct’26 and Sep/Mar’27 Brent futures spreads are at $2.06/bbl and $8.40/bbl respectively.

Volatile morning in dated. We saw Bal Jul/Aug Dated trade down from -$0.1/bbl to -$0.18/bbl with paper buying and MMs selling. We also saw strong Aug Dated vs Sep ICE selling from Chinese, pushing down DFLs with Aug DFL trading down to $1.82/bbl. In the front, 20-24 Jul cal Aug was hit low at -$0.65/bbl and saw sell side interest in 21-27 Jul Dated offered at -$0.65/bbl. Further down the curve we saw buying again in Q1'27 DFL from a major.

A stronger start to the week on HSFO. The 380 crack traded up to -$2.80/bbl on a stronger E/W and barge crack. 380 spreads opened a fair bit stronger this morning, with Aug/Sep 380 trading up to $17.50/mt off the bat out of Singapore before relaxing somewhat into the window on lower crude down to $16.25/mt. As mentioned 380 E/W was stronger, with buying up to $31.00/mt. The barge crack was initially better offered this morning trading down to -$8.20/bbl, however soon saw buying, trading up to -$7.60/bbl throughout the morning. Barge spreads were largely illiquid with Aug/Sep barges bid up to $9.00/mt.

A stronger start to the day on Sing 0.5. Aug/Sep Sing traded up to $42.00/mt initially on higher crude. The Aug sing crack followed suit buying up to $21.00/bb on fairly thin liquidity. Heading into the window crude came off and selling came in on Sing spreads, Aug/Sep Sing relaxed down to $41.25/mt while the front Sing crack traded back down to Fridays close of $20.30/bbl. Euro 0.5 was fairly illiquid this morning. With both spreads and cracks following the trend of Sing 0.5. Aug Euro crack was implied around $7.50/bbl while Aug/Sep Euro was implied up to $23.25/mt.

This morning in gasoline, flat price traded end window at $107.85/bbl with MOC better bid. The East was stronger overall, with Aug 92 cracks firming from $21.50/bbl to $22/bbl, and Q4 was bid at $13/bbl. Spreads opened higher on stronger crude, with Aug/Sep trading up to $5.90/bbl before softening to $5.60/bbl during the window. EW was a touch firmer as well, trading up from -$15/bbl to -$14.90/bbl, with EBOB cracks trading at $37/bbl. Spreads went better offered as crude came off, with Aug/Sep weakening from $77.50/mt to $75/mt.

This morning in Naphtha, MOC better bid in Aug with +5c getting lifted. Spreads open well bid with prompt cracks higher than Fridays close, seeing physical players buyside of Aug/Sep MOPJ at $56/mt. Buyside interest in flat price spreads in Q4/Q1 region in Naphtha this morning, seeing buying in Dec/Jan Europe up to $9.75 – approx. 15c higher on a crack roll basis to where we saw buying on Friday. These Q4/Q1 spreads get sold offered on, and we see prompt spreads weaker on a crude basis as well into the window, with Aug/Sep MOPJ trading at lows of $47/mt. In Europe prompt crack trades up from -$1.75/bbl to -$1.3/bbl end of window.

This morning in NGLs, FEI initially opened strong before coming off across the morning. There was early Chinese buying of FEI flat price out of Sep and Oct at $694/mt and $678/mt respectively, and Nov/Dec was trading at $13/mt. Sep/Oct FEI opened at a trading level of $21/mt, before strengthening to settle at $24/mt end window. Aug/Sep FEI traded to a high of $46/mt, before coming off slightly into window to print at $43/mt. Aug LST/FEI was trading at -$321/mt, down from -$301/mt at Friday’s close, and ended the morning printing at -$324/mt. FEI/MOPJ’s were trading at -$75/mt in the early morning, but as FEI began to turn, it weakened to a trading level of -$81/mt. There was also some pronap buying in Aug at -$195/mt, down $3 from last week’s close. End window on screen, Aug FEI flat price was lifted at $727/mt, having reached a high of $750/mt on the day.

* U.S. equities closed lower no Friday with Nasdaq -1.5% & S&P down 1% on continued AI fallout, this time over the rise of new Chinese models (Moonshot) to compete with OpenAI and Anthropic. Surprisingly today’s Brent move (+$3.2) sees virtually no change from markets, the dollar, U.S. 2-year and gold all within 0.3% of Fridays close. Over in Asia the Kospi has another circuit breaker, currently -4.4% lower on the day.

* Gold primed for an aggressive move shortly (Bloomberg)

* Consumer confidence in the US is strengthening. The University of Michigan sentiment index beats expectations across the board. Current conditions and expectations improve, while 1 year and 5 10 year inflation expectations soften.

* The Nikkei 225 dropped -4% on Friday, now more than -10% below its June 25 peak, marking a technical correction and its worst weekly loss since April 2025. The broader Topix fell -2.7%, with Tokyo Electron alone contributing the most to the decline after sliding -8.2%.

* Chinese AI startup Moonshot rumbled through global markets. The company claims its new Kimi K3 model rivals top offerings from OpenAI and Anthropic in a release reminiscent of last year’s “DeepSeek moment.” It came as President Xi Jinping appeared at China’s premier AI summit, underscoring how rapidly the nation’s AI developers are closing the gap with US rivals.

* Hedge Funds Amass Biggest New Zealand Dollar Net Short Since 2006

* While Apple makes another all-time high, $1 trillion has been erased from SpaceX stock since its peak, at $225.6, now trading $124. Having said that SpaceX, is in talks to provide compute power to the US Pentagon, per WSJ.

* RBI intervenes to Support Rupee as Currency Nears Record Low – Bloomberg

* Gold miners are now cheaper relative to the S&P 500 than at any point in history.

* Ukraine hit 4 oil depots in Russia's Stavropol Krai region this morning, plus 3 more oil tankers in the Black Sea. Depots and tankers on the same day means both the storage side and the transport side are getting hit simultaneously. The fuel crisis inside Russia is compounding.

* 1.2 million Koreans were hit with margin calls in the latest KOSPI crash. As of July 13, 1 in 30 south Korean adults saw their leveraged retail accounts get hit by margin calls. Roughly 340,000 individuals were fully liquidated, with some left owing money to their brokers. SK Hynix and Samsung accounted for roughly one-third of all leveraged positions. Their sharp synchronized selloff exacerbated the blow up, hitting younger degens the hardest. Almost two-thirds of all younger traders got liquidated.