OIL PRODUCTS: European Diesel Markets Face Winter Tightness

The Daily Telegraph reports that, according to a senior Trump administration official, the White House is "deeply concerned" about the appointment of Ed Miliband as Secretary of State for Foreign, Commonwealth and Development Affairs in the Cabinet of new PM Andy Burnham. Telegraph: "His appointment came despite private warnings from Donald Trump’s team that they would find it difficult to work with him in any international-facing role. A senior Trump administration official told The Telegraph that Miliband would be a “point of friction” in the transatlantic relationship because of his support for green energy projects that Trump has criticised." 

• Miliband previously served as Energy Secretary under PMs Sir Keir Starmer and Gordon Brown, and has been one of the most vocal advocates for the UK pursuing net zero and in opposing new O&G drilling licences in the North Sea.
• Indeed, the day before Burnham's appointment as PM and amid speculation that he would permit drilling licences at two already-approved fields in the North Sea, Trump posted on Truth Social in support of further exploitation of the UK's O&G assets. Subsequent reporting suggests the ban on new exploration will remain.
• A poor initial relationship between the new Foreign Secretary and the US could risk market-relevant impacts. Trump has proved willing to hit erstwhile allies with high tariffs for seemingly minor protocol infractions or situations outside their control. Any initial rancour or disagreement between the Foreign Office and the Trump administration could risk a similar blowback. 

• ILTR usage picked up again to GBP78.382bln, after GBP74.364bln last week (net increase of GBP4.108bln;  gross usage today of GBP7.362bln).
• Take-up once again driven by Level A collateral usage, which has risen to GBP57.877bln (net increase of GBP4.628bln).
• A reminder that the 1.50% Jul-26 Gilt redeems tomorrow. Of the GBP44.7bln maturing, APF holdings total GBP27.4bln.  As such, Thursday’s STR operation will be interesting, particularly after last week’s large fall in take-up. 

Tasnim notes "amid escalating tensions in the region, news sources have reported hearing explosions at the headquarters of the U.S. Fifth Fleet naval force in Bahrain."

• "Warning sirens have been sounded in Manama, the capital of Bahrain, and residents have been instructed to take shelter."
• "News sources have reported that warning sirens were activated in Qatar."