Sep Brent falls below $72, US-Iran technical talks underway in Qatar

This morning the Sep’26 Brent crude futures traded lower from $73 to $71.70/bbl where it found better support, before rising above $72/bbl by 11:00 BST (time of writing). In the news, US-Iran technical talks are now underway in Qatar, with at least three working groups discussing the nuclear issue, diplomacy, and the financing and return of frozen funds. Hungary's energy company MOL said on Wednesday that it received an official license from the US Treasury's Office of Foreign Assets Control to continue negotiations on the purchase of Serbia's Russian-owned NIS oil firm until July 31. Nepal rolled back fuel prices by up to 17%, an official statement said on Wednesday, as the Himalayan nation responded to a fall in global prices following progress towards ‌ending the war in Iran. Swiss-based commodities trading house Mercuria and Italian oil and gas major Eni have agreed to set up a joint venture, the companies said on Wednesday. An explosion at the alkylation plant of Pemex's ‌Antonio Dovali Jaime refinery in Salina Cruz, Oaxaca, left three workers injured, Mexican newspaper El ⁠Universal reported on Tuesday. Finally, the Sep/Oct’26 and Sep/Mar’27 Brent futures spreads are at -$0.25/bbl and $0.50/bbl respectively.

This morning in Brent/Dubai we initially opened lower, but then a weak Dubai partials window saw us rally in the Aug bd from $3.7/bbl to $4.8/bbl. The balmo sold off from -$0.72/bbl to -$1.65/bbl. There was also large selling by trade house of Aug/Sep Dubai spread which traded down from -$0.54/bbl to -$1.03/bbl. The boxes all rallied, the Aug/Sep box up from $0.7/bbl to $1/bbl. There was some products selling of Q1 and Q2 27 BD and Apr 2027 bd around $2.1/bbl, $1.65/bbl and $1.7/bbl.

HSFO cracks were stronger this morning after experiencing some selling early doors. Aug/Sep 380 traded down to $0.00/mt before recovering to $0.50/mt. Cracks in both regions found some strength post window, with Aug 380 and barge crack closing the morning around -$7.30/bbl and -$9.20/bbl respectively. Barge spreads remained buoyant after yesterday strength with Aug/Sep around $2.00/mt this morning.

VLSFO opened the month under pressure. Aug Sing cracks traded down to $12.60/bbl from overnight levels of $13.30/bbl. However heading into the window spreads turned better bid and the Sing crack selling left the market. We saw a recovery on all things Sing 0.5. After getting down to $15.00/mt the front recovered to $16.00/mt. The Aug Sing crack recovered to where it closed last night at $13.30/bbl. Euro 0.5 largely followed Sing 0.5, with no clear axe in the market. The Euro crack finished the morning around $5.25/bbl after being implied down to $4.80/bbl at some point this morning. A similar trend on Aug/Sep Euro, implied down to $13.00/mt before trading up to $13.50/mt.

This morning in distillates, Sing gasoil spreads saw some selling in Sep/Dec, trading at $9.70/bbl, while July/August was well offered, trading from $2.25 down to $1.95/bbl. EW saw selling in September, while July EFS remained buy side, Sep EW trading from -$42.75 down to -$45.25/mt. Regrade was well bid in the front, with August trading up to -$0.30/bbl.

Prompt ICE gasoil spreads rallied into and post window, with Sep/Dec trading from $78.5 up to $87.25/mt, while cracks reached highs of $49.6/bbl in September. Heating oil spreads rallied, while HOGOs were rangebound, August HOGO swap around 30.7c/gal.

This morning in gasoline, flat price traded end window at $90.68/bbl with MOC slightly better bid. Cracks opened higher, with July 92 cracks trading up to $18.40/bbl before softening post window. Spreads were mixed, initially seeing better buying up to $3.40/bbl for Aug/Sep before getting sold down to $3.20/bbl by refiners. EW weakened again, with Aug trading down from -$12.30/bbl to -$12.60/bbl with EBOB going bid. Cracks rallied from $30.15/bbl to $30.85/bbl in Aug, and the balmo spread got bid up from $41/mt to $47/mt on a strong barge open.

This morning In Naphtha, MOC relatively balanced with Aug MOC slightly better bid, getting lifted +5c with mixed interest in Sep MOC. This morning we saw Aug EW get hit $25/mt but strengthen across the morning with some real buyside interest, trading up to $29/mt end of window with the Aug/Sep EW box also pricing higher today. Iceberg seller of Aug/Sep Europe on screen at $14.5/mt for good size, with buyside interest in the Aug Europe crack – seeing buying up from -$3.55/bbl to -$3.1/bbl.

This morning in NGLs, there was some early FEI flat price selling out of Aug at $568/mt. FEI spread interest in the deferred, with Dec'26/Dec'27 trading at $48/mt, and Nov'26/Jan'27 at $6/mt, both 50c weaker than yesterday’s closing levels. In the front, Aug/Sep FEI was trading at $8/mt, where it firmed into window, and Nov/Dec was lifted at flat. Saw some real selling of LST/FEI and had a bank on the sell side of Cal'27 at -$157/mt. Jul/Aug LST was also trading, lifted at -0.125c/gal and then again at flat. End window on screen, $568/mt was lifted in Aug FEI.

* Precious metals continue their bear market with gold -29%, silver -53% and Bitcoin also down 54% from their respective highs. The global gold-backed ETFs posted -38.3 tonnes in outflows last week, the largest weekly outflow since September 2022.

* Meanwhile Russell 2000 growth stocks (IWO), Real estate (XLRE) and regional banks (KRE) all breaking out higher on the monthly charts.

* Strong secondary U.S. data with JOLTS job openings at 7.59 mio (estimate 7.3mio), and better than expected Dallas Fed. While Japan’s Tankan jumped this morning, manufacturing jumping to 22 from 17. We have global PMIs today (ISM in US).

* White House officially lifts export controls on Anthropic’s Fable 5 & Mythos 5 AI models.

* The NAS100 just closed out Q2 +27.5% its best quarter since gaining 30% in Q2 2020. Worst month for Microsoft since 2000, best quarter ever for semis ("chipmakers"). So AI CapEx spenders are punished, while AI CapEx sellers rewarded.

* The US Equity Sentiment Indicator has surged to 2.0 - the second-highest reading since 2021, just before the 2022 bear market - combining 9 measures of institutional, retail, and foreign investor positioning into a single score where readings above 1.0 have historically flagged near-term risk. This extreme level has now persisted for several consecutive weeks, a degree of sustained stretched positioning rarely seen over the past decade. Beneath the surface, a telling divergence is forming: retail investors are growing increasingly optimistic while institutional investors have quietly been reducing exposure, particularly in U.S. Tech. (Goldman Sachs)

* S&P 500 gamma has collapsed from record highs to deeply negative territory: Gamma has swung from +$22 billion, one of the highest readings since 2021, to -$5 billion, one of the fastest reversals on record. Gamma measures how much market makers must buy or sell in stock futures to hedge their options positions. When gamma is positive, market makers act as a stabilizing force, buying dips and selling rallies.