Brent weakens as oil supply through Strait of Hormuz rebounds

President Trump rejected an Axios report claiming his administration offered sanctions relief and frozen funds, calling it a hoax on a Truth Social post. Iranian Foreign Minister Abbas Araghchi said he expected a formal answer on Tuesday from the US to Tehran’s proposal to open the Strait of Hormuz. The UK government is privately lobbying the Trump administration for an exemption from any potential US diesel export ban. Aliko Dangote is racing to attract investors to his refinery’s IPO, seeking to raise $1.6 billion, mostly from retail investors, to help double the refinery’s capacity to 1.4mb/d by Q1’29. The EU is considering a potential one-year delay to methane import rules amid tight energy supplies, while the IEA may discuss strategic oil stock releases if diesel and product markets require additional support. Q8 will cap Italian petrol prices for one month from Oct 1, joining Eni and SOCAR as energy firms seek to ease consumer costs and reduce pressure on the government to impose a windfall tax. Texas is allowing wider use of tax-exempt dyed diesel on public roads amid record US diesel prices and global supply disruptions, as Trump considers restricting US diesel exports. Finally, the Nov/Dec’26 and Nov/May’27 Brent futures spreads are at $7.58/bbl and $17.70/bbl respectively.

Better offered this morning in dated with Oct DFL trading down to $10.1/bbl and Oct/Nov Dated down to $9.05/bbl. We saw better selling of Nov rolls with selling of Cal Nov vs 23-27 Nov down to $1.6/bbl and sell side interest in Cal Nov vs 16-20 Nov. We also saw selling Cal Oct vs 15-21 Oct. Further down the curve initially saw a major selling Q1'27 DFL aggressively before some paper buying came in.

This morning in Brent/Dubai we traded rangebound. The Oct B/D traded between -$3.5/bbl to -$3.05/bbl. There was some phys selling around -$3.4/bbl. There was products buyside interest of Q1 and Q2 B/D, around $0.6/bbl and $0.54/bbl. The Dubai spreads all traded weaker, the Oct/Nov box trading up from -$3.6/bbl to -$3.2/bbl, fund on the bid. The Dubai spreads were better offered by Tradehouse, from Jan through to June 2027.

Prompt 380 spread traded in slightly lower volume than usual, it sold down from $41.25/mt to $40.00/mt where it found support and consistemtly traded post window, Nov/Dec initially traded up from $30.00/mt to $30.50/mt in the early morning before OTC selling pushed it down to $29.75/mt by window start, it continued to struggle for support post window and traded down to $28.50/mt. Oct 380 crack saw little volume traded, but traded around $2.10/bbl. Little was spoken of Barge spreads this morning, Oct/Nov traded at $17.50/mt while Oct Barge crack traded between -$10.25/bbl and -$10.10/bbl, Nov crack saw better volume traded but price action was muted, it traded between -$9.40/bbl and -$9.60/bbl.

Sing 0.5% spreads opened at similar levels to yesterdays close, but started to come off as the morning progressed, Oct/Nov opened around $36.00/mt and traded here in the window, post window it came off slightly and traded down to $35.50/mt, Nov/Dec similarly opened at $35.00/mt and traded here in the window but encountered OTC sell side interest post window and traded down to $34.25/mt. Oct Sing crack opened around yesterday evenings levels at $23.30/bbl it was then bid up on screen to $23.60/bbl before quickly reversing and getting offered down on screen to $23.10/bbl, it traded down to $22.90/bbl in the window and has traded between here and $23.15/bbl post window. Nov Sing crack encountered real selling and weakened from $21.20/bbl to $20.60/bbl. It was yet another thin morning in Euro 0.5, Oct/Nov weakened from $10.50/bbl to $10.00/bbl post window while Nov/Dec also weakened by 50c to $12.00/mt, Oct Euro crack has only traded once at -$1.05/bbl while Nov Euro crack traded down from $0.85/bbl to $0.70/bbl.

This morning in distillates, Sing gasoil spreads were better bid, with Oct/Nov trading from $4.45 up to $4.70, then back to $4.45/bbl into the window. EW sold off from -$131 down to -$134, while Dec was hit down to -$100 and is now trading back up to -$97/mt. Oct/Nov kero was mixed, trading at $2.8/bbl, while Nov regrade was hit down to lows of -$1.85/bbl. Prompt ICE gasoil spreads firmed, with Nov/Dec trading from $58 up to $63.25/mt, while Nov cracks firmed from $80.5 up to $83/bbl.

This morning gasoline was mixed. The East was better supported than EBOB, with Oct E/W trading up from -$8.65/bbl to -$6.50/bbl. 92 cracks opened higher at $32/bbl where they found mixed interest, and spreads were well bid up from $10.50/bbl to to highs of $11/bbl. EBOB was weak, with cracks getting sold down from $39.50/bbl to $38.40/bbl in Oct, and Oct/Nov weakened from $98/mt to $96.50/mt. Oct arbs were better bid from -7.60c/gal to -6.50c/gal which pressured front EBOB on weaker RBBR’s.

This morning in naphtha was weak again, with MOC offered; spreads were initially bid on stronger overnight Brent before turning offered, while front cracks stayed weak. MOPJ spreads saw the heavier volume, with Oct/Nov falling from $23.50/mt to $20/mt before recovering to $20.5/mt and Nov/Dec moving from $23/mt to $20.25/mt before ending at $20.5/mt; Oct cracks were around -$0.70/bbl, Oct/Nov roll at -$1.10/bbl and Q1'27 -$1.55/bbl. E/W opened bid, with Oct rising from $58/mt to $60.50/mt before settling at $59.50/mt, while the Oct/Dec box firmed from $0.25/mt to $1/mt on relative European weakness. NWE naphtha weakened further, with Oct cracks falling from around -$6.80/bbl to -$7.60/bbl before recovering to -$7.30/bbl as Brent fell; spreads came under pressure, with Oct/Nov abd Nov/Dec down to $20/mt from $22.75/mt and $22.50/mt respectively, while Jan/Feb was $18.75/mt.

This morning in NGLs, CP settle with released with C3 CP $680/mt and C4 CP $730/mt. Oct FEI correlated to crude this morning and softened from $845/mt to a session low of $838/mt before being better bid into end window to a trading level of $844/mt on screen. FEI spreads were largely unchanged from yesterday’s closing levels, with Oct/Nov trading at $33/mt and $32.5/mt, and Nov/Dec was firm at $28/mt across the morning. Also saw buying of Feb/Apr'27 FEI at $68.5/mt. FEI/MOPJs stronger on the day as MOPJ was weak. Oct FEI/MOPJ strengthened from -$25/mt this morning to print -$21/mt by the end of the window, and Dec was trading -$40/mt, compared to last night’s closing level of -$46/mt. FEI/CP weakened in Nov, falling from $170/mt to a low of $157/mt with lack of buying support, before recovering to $163/mt by the end of the window. Against FEI’s intraday swings, Oct LST/FEI traded as high as -$372/mt before ending the window at -$377/mt.

Stocks fall on Trump’s rejection of Iran deal. Nasdaq 100 lost -1.1%, S&P fell -0.8%. Gold fell -4% and silver -5.7% as real yields continue to surge with 30-year touching 5.58%. More and more discussion and focus on the potential negative impact of bond yield volatility on equities, as you can see here from the MOVE Index (Bond volatility) and the S&P.

Retail investors have bought just $1B of individual U.S. stocks over the last 20 trading days, one of the lowest rolling totals in at least 2 years and down from roughly $20B in April 2025. In early August the figure briefly turned negative for the first time since at least October 2024. Total retail equity purchases have slowed to $10B, down roughly 67% from $30B in February 2026.

And as the dollar continues to surge EURUSD sits on critical support at 1.1355.

Retail investors have bought just $1B of individual U.S. stocks over the last 20 trading days, one of the lowest rolling totals in at least 2 years and down from roughly $20B in April 2025. In early August the figure briefly turned negative for the first time since at least October 2024. Total retail equity purchases have slowed to $10B, down roughly 67% from $30B in February 2026.

The 30-year U.S. Treasury Price Return Index has fallen 60% since 2020 to roughly 107, matching its lowest level since 2000. With the 30-year yield up 478bp from its 0.71% intraday low in March 2020, 6 years have erased nearly two decades of gains. The previous largest drawdown in 40 years was roughly 35%, during the 2008 Financial Crisis. Over the same period, U.S. nominal GDP has grown approximately 63%.

U.S. data center IT power demand is projected to rise 755% from 2025 levels to 78.57 GW by 2029. It is expected to nearly double to 17.96 GW this year, then rise another 97% in 2027. Between 2026 and 2028, U.S. data centers are expected to need 97 GW, against 21 GW under construction and 19 GW of available grid capacity, which leaves a potential 57 GW shortfall. Servers built on NVIDIA's Vera Rubin and Rubin Ultra architectures are expected to drive a 5x increase in IT power demand between 2025 and 2028.