AMERICAS OIL: Americas End-of-Day Summary: Crude Sells Off
Jan-14 19:33
January 14 - Americas End-of-Day Oil Summary: US Crude Sells Off Following Spike Due to Latest US Sanctions on Russia
- WTI crude oil futures took profits Tuesday off the rally triggered by the Biden administration’s imposition of sanctions on Russia and as a Gaza ceasefire appeared to be close at hand, though refined product cracks started to spike on news that Colonial Pipeline had shut Line 1.
- Colonial Pipeline’s Line 1 was shut down for 12 hours. It transports 1.5mbd of gasoline between Houston, Texas, and Greensboro, North Carolina. This was on a gasoline-only part of the line though other products are transported by Colonial. The likely impact is marginal if the closure is limited to 12 hours, however, beyond that there could be product price implications in PADD 1 and possibly PADD 2.
- A WSJ survey indicated crude stocks fell 1.1m bbl in the week ended Jan 10 when EIA issues its weekly EIA report on Wednesday. Gasoline stocks are seen up 1.9m bbl and distillate stocks are seen up 100k bbl.
- The NOAA 6–14-day outlook retains below normal temperatures across a wide swath of the country now with parts of California forecast milder.
- WTI Feb futures were down 1.5% at $77.63
- WTI Mar futures were down 1.0% at $76.50
- RBOB Feb futures were up 0.3% at $2.11
- ULSD Feb futures were down 0.2% at $2.53
- EIA issued its January Short-Term Energy Outlook, cutting its forecast for global oil demand in 2025 by around 0.2m b/d to 104.1m b/d. WTI spot is forecast to average $70.31/b in 2025, down $1.19/b on the December forecast. WTI for 2026 has been forecasted at $62.46/b.
- The WSJ reported President-elect Trump is preparing a set of energy-related executive orders to be signed after he is sworn in to unwind Biden’s rules on drilling on federal lands, tailpipe emissions and LNG exports approval.
- While gasoline cracks were supported by the Colonial Pipeline news, diesel cracks were also supported by rising US heating demand and Russian sanctions.
- US Secretary of State Blinken said a Gaza ceasefire is ready to be concluded and implemented if Hamas agrees to the conditions of the framework. He added the Palestinian Authority should invite partners to establish and run an interim administration in Gaza.
- Pemex’ Deer Park, Texas, refinery reports an oil sheen was observed in the Houston Ship Channel.
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MACRO ANALYSIS: MNI US Macro Weekly: Inflation Data Keep Fed Cut On Track
Dec-13 21:13
We have published and e-mailed to subscribers the MNI US Macro Weekly offering succinct MNI analysis across the range of macro developments over the past week. Please find the full report here:
USDCAD TECHS: Fresh Cycle High
Dec-13 21:00
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4236 @ 16:38 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
US TSYS: Extending Late Session Lows, Curves Bear Steepen Ahead Next Wed's FOMC
Dec-13 20:40
- Treasuries traded steadily lower throughout Friday's session, initially mirroring weak action in Bunds and Gilts. By the close, the Mar'25 10Y contract slipped to 109-26 (-18) the lowest level since November 22, 10Y yield rising to 4.4046% high (+.0768).
- Initial technical support at 109-22 (76.4% Nov 15 - Dec 6 Upleg) followed by 109-20 (Low Nov 20/21).
- Curves bear steepened: 2s10s +2.272 at 15.568 as short end rates outperformed ahead of next week's FOMC policy announcement where another 25bp rate cut was expected but not certain amid current macro and political uncertainty. That said, the latest unemployment and inflation data have kept the FOMC on track to cut the federal funds rate by 25bp (to 4.25-4.50%) next Wednesday.
- Projected rate cuts into early 2025 look near steady to lower vs. this morning levels (*) as follows: Dec'24 cumulative -24.3bp (-23.7bp), Jan'25 -28.6bp (-29.6bp), Mar'25 -42.2bp (-43.9bp), May'25 -48.4bp (-50.5bp).
- No reaction to this morning's import/export prices, Monday brings flash S&P Global PMIs, Retail Sales, IP & Cap-U on Tuesday.
