OIL: Americas End of Day Oil Summary: Crude Declines
Aug-29 18:18
US OIL: August 29 - Americas End of Day Oil Summary: Crude Declines
Oil markets pulled back Friday, after trading mostly rangebound for much of the day, selling off some of the Russia sanctions fear premium from yesterday.
- US total rig count 536, Baker Hughes says; US oil rig count up 1 to 412
- Kazakh oil flows from CPC terminal is in normal mode and oil is still flowing through still-operational CPC mooring. The system is receiving producers’ crude without limit.
- Russia expects that the US will continue its efforts within the Alaska agreements according to TASS and Russia assumes that contact with the US to discuss “mutual irritants may take place in coming weeks.
- Expectations of a Trump announcement on Russian-Ukraine yesterday saw oil prices move higher over sanctions fears. An announcement is yet to be made.
- Hopes of a Russia/Ukraine peace deal fade by the day, putting pressure on Trump to make good on his Russia secondary sanction oil threats.
- Indian oil buying sustains into September despite US pressure and 50% tariffs since Wednesday.
- Saudi Aramco may cut the official selling price for Arab Light crude by $0.5/bbl on the month for sales to Asia in October, according to a Bloomberg survey of seven traders and refiners.
- Gasoline and diesel cracks drift lower, tracking the crude move as Thursdays Russia risk premium prices out slightly.
- WTI Oct futures were down 0.9% at $64.00
- WTI Nov futures were down 1.0% at $63.45
- RBOB Sep futures were down 1.4% at $2.17
- ULSD Sep futures were down 1.9% at $2.27
- US gasoline crack down 0.3$/bbl at 18.68$/bbl
- US ULSD crack down 0.9$/bbl at 31.41/bbl
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FED: Statement Updates Nod to Moderation In Domestic Demand
Jul-30 18:06
As we'd suggested, the new statement cleans up the language in the first two paragraphs a little, with a slightly dovish twist.
- It maintains the language around the "swings in net exports", but makes note of growth in economic activity having "moderated in the first half of the year" (versus the prior mention of "has continued to expand at a solid pace"). That's potentially a nod to softer domestic demand amid the swings in headline GDP. We expect this to be addressed by Powell in his press conference at 2:30pm.
- The language about the labor market (unemployment rate remains low, conditions remain solid) and inflation (remains somewhat elevated) are unsurprisingly unchanged.
- The removal of "has diminished but" re uncertainty (which still "remains elevated") in then 2nd paragraph was fully expected, and the two dissents by Waller and Bowman in favor of a cut were also expected by most.
US TSYS: Post-FOMC React
Jul-30 18:04
- Treasury futures pare losses after the FOMC kept rate steady, Fed Govs Waller & Bowman dissented in favor of a 25bp cut. Tsy Sep'25 10Y futures currently trades -3.5 at 111-08 (111-00.5 low, 111-14.5 high).
- Key support is 110-08+, the Jul 14 and 16 low. Clearance of this level would reinstate a bearish theme. First support is at 110-19+, the Jul 24 low. Resistance above at 111-13+, the Jul 10 high, has been pierced. A clear break of it would highlight a stronger reversal and open 111-28, the Jul 3 high.
- Curves mildly steeper: 2s10s +0.953 at 45.898, 5s30s +1.393 at 96.921
- Cross asset: Stocks mildly higher (SPX eminis +8.5 at 6414.5), Gold weaker at 3298.0, Bbg US$ index pares gains: 1214.61 (+4.63).
FED: FOMC Statement Comparison - July vs June
Jul-30 18:00
Changes in the July FOMC statement vs the previous meeting (June):
