OIL: Oil Summary At European Close: Crude Rises
Crude is higher today ahead of the Fed decision later and a Trump-Xi meeting tomorrow, also supported by a larger than expected draw in US crude stocks. Meanwhile, Sunday’s OPEC meeting and uncertainty over the impact of the latest sanctions against Russia remains in focus.
- Brent DEC 25 up 1.2% at 65.19$/bbl
- WTI DEC 25 up 1.2% at 60.87$/bbl
- EIA data showed US crude inventories for the week to Oct. 24 fell by 6.86mbbl compared to a Bloomberg survey expectation of a 0.7mbbl draw and API draw of 4mbbl.
- Indian refiners are considering whether to continue Russian crude purchases from smaller producers as long as they complied with sanctions, according to Bloomberg.
- India’s state-owned Mangalore Refinery and Petrochemicals Ltd. (MRPL) will pause all buying of Russian crude for now, according to a company executive cited by Bloomberg.
- A tanker carrying Russian crude, which was heading to India, reversed course and is now idling in the Baltic Sea as a sign on oil trade disruption, Bloomberg said.
- The latest sanctions against Rosneft and Lukoil have yet to disrupt physical crude loadings from Russia’s western ports, Reuters reports citing sources.
- Presidents Trump and Xi meet Thursday in S. Korea and at this stage are expected to sign a trade deal.
- The Fed decision later Wednesday is expected to cut rates 25bp.
- OPEC is widely expected to add 137k b/d to output targets for December in its Sunday meeting.
- Record volumes on sanctioned Russian, Iranian and Venezuelan oil on the water shows the barrels are still moving although taking longer to clear, Vortexa said cited by Bloomberg.
- MNI Oil Weekly: https://enews.marketnews.com/ct/x/pjJsdlCNl-sI6aw1Ih1wEg~k1zZ8KXr-kA8x66XX5ajptQM3-9HJw
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SECURITY: Trump Admin Will Proceed w/AUKUS Following Pentagon Review - Nikkei
Nikkei Asia reporting, “The Trump administration will proceed with the AUKUS defense pact linking the U.S., U.K. and Australia, maintaining the original timeline that includes the sale of three Virginia-class submarines to Canberra beginning in 2032...” The report comes after a Pentagon review in June, ordered by US Undersecretary of Defence Elbridge Colby, threw doubt over US participation in the nuclear submarine alliance.
- Senator Jeanne Shaheen (D-NH), the ranking Democrat on the Senate foreign relations committee, told the Financial Times in June that news of the administration backing away from Aukus would “be met with cheers in Beijing, which is already celebrating America’s global pullback… Scrapping this partnership would further tarnish America’s reputation and raise more questions among our closest defence partners about our reliability.”
- Australian defence think tanks have speculated that the AUKUS review may have been a strategic play by the Trump administration to pressure Canberra to increase defence spending. The Lowry Institute noted in July, “If the Pentagon’s review really is designed to leverage higher defence spending out of Australia, the PM will either have to perform a humiliating backdown or stand his ground…”
- Nikkei reports, “The review of pact will wrap up before Australian Prime Minister Anthony Albanese visits the White House on Oct. 20.”
US TSY FUTURES: BLOCK: Large Dec'25 5Y Sale
- -10,400 FVZ5 109-05.5, sell through 109-06 post time bid at 1137:54ET, DV01 $456,300.
- The 5Y contract trades 109-05.5 (4) last
TARIFFS: Switzerland Offers Gold Industry Investments As US Sweetener
Switzerland has "has offered to invest in the US gold-refining industry, as part of its efforts to persuade the Trump administration to lower the 39% import tariff imposed last month", Bloomberg reports. Note that is already the second headline crossing today on Swiss - US relations following this morning's re-commitment for non-manipulation of FX rates ('Switzerland - US Reconfirm Not Manipulating FX Rates' - MNI, Sep 29).
- "The proposal made to US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer would see Swiss refiners move their lowest-margin business to the US, according to people familiar with the talks. That includes melting down the gold bars traded in London and recasting them into the smaller bars favored in New York", Bloomberg adds.
- Switzerland previously made little to no apparent progress in further trade negotiations following the US's 39% tariff announcement on August 1. The Bloomberg article does not comment on the impact of the proposal on the negotiations. SECO (Swiss government ministry) downwardly revised their 2026 growth estimate from 1.2% to 0.8% as a function of the tariffs. The SNB meanwhile sees the tariff impact as "limited" on aggregate for the Swiss economy.
