OIL: Crude Continues Selling Off As Venezuelan Oil To Flow To US
Oil has faced further downward pressure today after US data showed large product inventory builds and President Trump announced Venezuela will ship “between 30 and 50 MILLION barrels of High Quality Sanctioned Oil” to the US. Both events added to ongoing concerns over a global supply glut pushing prices down further after Tuesday’s 2% decline. In addition, the discussion of security guarantees Tuesday may have brought a Ukraine deal closer.
- WTI is down 1.6% today to $56.24 after falling to $55.76 following Trump’s Truth Social post but holding above initial support at $54.89. Brent is 1.1% lower at $60.02 with the break below $60 short-lived. While technicals signal a dominant downtrend, it is holding above support at $58.53.
- Chevron & Quantum are set to bid for Lukoil’s assets after US imposed sanctions on Russia’s oil majors, according to the FT.
- Without a timeframe it is difficult to understand how Venezuela will be able to send 30-50mn barrels of oil to the US. The IEA reported that it produced only 860 kbd in November 2025 down from around 1mbd earlier.
- It is reported that Chevron, who still has operations in Venezuela, has sent 11 tankers to begin transporting oil to the US. Gulf refineries are geared to refine heavy, sour crude of the type that Venezuela produces.
- Bloomberg reported that there was a 2.8mn barrel US oil inventory drawdown last week, according to people familiar with the API data. Gasoline inventories rose 4.4mn and distillate 4.9mn. The official EIA data is out Wednesday.
- Later on Wednesday US December ADP employment, November JOLTS job openings, December ISM services and final October orders print. The Fed’s Bowman speaks on banking regulation. In Europe, preliminary December euro area CPI and November German unemployment & retail sales are released.
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JGBS: Mostly Cheaper With 10YY A Fresh Cycle High ut A Subdued Session
JGB futures are slightly weaker, -3 compared to settlement levels, after a relatively subdued session.
- MNI Techs Team - Futures prices traded to new pullback and cycle lows again Friday, weighed by building expectations of a December BoJ rate hike and a breach of support in futures prices. This affirms the firm downtrend that's dominated prices since mid-September, and prices will need to challenge resistance before signalling any broader reversal. Key short-term resistance has been defined at 137.30, the Sep 8 high.
- MNI - Japan's Q3 GDP fell 0.6% q/q, or an annualised -2.3%, compared with the initial estimate of -0.4% q/q, or -1.8% annualised, as capital investment and public spending were revised down, although private consumption was revised slightly higher. Private consumption, which accounts for about 60% of Japan's GDP, was revised up to 0.2% from 0.1%, though its contribution remained unchanged at 0.1 pp.
- Cash US tsys are little changed in today's Asia-Pac session after Friday's modest sell-off.
- Cash JGBs are 2.5bps cheaper (20-year) to 0.5bp richer (40-year) across benchmarks, with the 10-year yield 1.0bp higher at 1.958%, a fresh cycle high.
- Swap rates are 1-3bps higher, with a steeper curve.
- Tomorrow, the local calendar will see Money Stock and Machine Tool Orders data alongside 5-year supply.
Source: Bloomberg Finance LP
US TSYS: Bonds Give Back Early Gains
US bond futures gave back earlier gains to be near where they started in the afternoon session. The US 10-Yr is flat at 112-17+ near to the 100-day EMA of 112-15. Topside resistance is the 50-day EMA of 112-26.
Cash has trended back to relatively unchanged across the curve having been lower in yields earlier.
- The 2-Yr is at 3.563%
- The 5-Yr is at 3.713%
- The 10-Yr is at 4.137%
- The 30-Yr is at 4.793%
There are no Tier 1 data releases tonight with markets looking ahead to the JOLTs Job Openings for October
Ahead tonight is a 13 and 26 week bill auction, with the focus being the U$58bn 3-Year auction.
OIL: Crude Holding Onto Gains As Watching Ukraine Developments
Oil prices are marginally higher as the market monitors Ukraine/Russia developments with negotiations ongoing, US President Trump criticizing Ukraine’s President Zelenskyy, Ukraine striking Russian refineries and Russia’s President Putin encouraging Indian oil purchases. Market expectations that there would be a peace deal faded over last week driving oil prices higher and they remain sensitive to events.
- WTI is up 0.2% to $60.21/bbl after falling to $59.97 with moves below $60 short-lived. It rose 2.7% last week. Brent is 0.2% higher at $63.88/bbl following a peak of $63.94 and a low at $63.63. It was up 2.4% last week.
- Both benchmarks have been in a very narrow range today as they wait for more information regarding geopolitical developments, including Venezuela, and monthly oil reports. Forecasts will be monitored closely for any upward revisions to 2026 surplus projections. The EIA short-term energy outlook is on Tuesday and OPEC & IEA reports on Thursday.
- Trump said that he was disappointed with how Zelenskyy has treated the latest US proposal and accused him of not reading it.
- The US and Ukraine agreed on a “framework for security arrangements” with “necessary deterrence capabilities to sustain a lasting peace”, according to the US State Department. However, Russia said that Trump’s National Security Strategy was “largely consistent” with Russia’s view.
- Ukraine struck Rosneft’s Ryazan refinery on the weekend in response to heavy attacks on its energy generation. This followed strikes late last week on Russia’s Syzran refinery and Temryuk port.
- Later US November NY Fed 1-yr inflation expectations and German October IP print. The ECB’s Cipollone and BoE’s Taylor & Lombardelli speak.
