OIL: Crude Continues Weekly Trend Lower
Crude futures and time spreads continue to drift lower this week with focus on the risk of a trade war impacting demand while Trump also looks to increase US output.
- Tighter global supply concerns due to sanctions on Russia and Iran are still providing support as Asian buyers look to non-sanctioned Middle East barrels and driving up shipping costs. Some Asian refineries are looking to reduce output due to narrower margins.
- EIA US crude inventories are today expected to show a draw of 0.83mbbl and with builds for gasoline and distillates. Canadian producers and US refiners could look to front load supplies ahead of threatened 25% tariffs from February 1.
- API data yesterday showed a crude stock build of 1mbbl, according to Bloomberg. Gasoline stocks rose 3.2mbbl and distillates rose 1.9bbl.
- BPCL has booked Russian crude supplies for Jan and Feb but is struggling to secure cargoes for March due to US sanctions, Finance Director said.
- US refinery capacity has taken a significant hit in January, with over 830kb/d offline due to seasonal maintenance activities, Kpler said. Two Port Arthur refineries lost power to some process units on Jan. 21 due to the winter storm.
- Brent MAR 25 down 0.4% at 78.65$/bbl
- WTI MAR 25 down 0.5% at 75.07$/bbl
- Brent MAR 25-APR 25 down 0.03$/bbl at 0.82$/bbl
- Brent JUN 25-DEC 25 down 0.05$/bbl at 2.91$/bbl
- US gasoline crack up 0.2$/bbl at 12.39$/bbl
- US ULSD crack down 0.1$/bbl at 26.16$/bbl
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EQUITY TECHS: E-MINI S&P: (H5) Resistance At The 20-Day EMA Is Intact For Now
- RES 4: 6178.75 High Dec 6 and key resistance
- RES 3: 6163.75 High Dec 16
- RES 2: 6064.86 20-day EMA
- RES 1: 6050.75 High Dec 20
- PRICE: 6036.75 @ 06:56 GMT Dec 24
- SUP 1: 5866.00 Low Dec 20
- SUP 2: 5811.65 38.2% retracement of the Aug 5 - Dec 6 bull leg
- SUP 3: 5784.00 Low Nov 4
- SUP 4: 5698.25 50.0% retracement of the Aug 5 - Dec 6 bull leg
A sell-off in the S&P E-Minis contract on Dec 18 highlights a S/T top and a corrective cycle. The move down resulted in a breach of the 20- and 50-day EMAs. A resumption of weakness would open 5811.65, 38.2% of the Aug 5 - Dec 6 bull leg. Support at 5921.00, Nov 19 low, has been pierced. A clear break of it would strengthen a bearish threat. Initial resistance is 6064.86, the 20-day EMA. A clear break of the EMA would be a bullish development.
SILVER TECHS: Bearish Cycle
- RES 4: $35.226 - 61.8% of the 2011 - 2020 major bear leg
- RES 3: $35.167 - 2.00 proj of the Aug 8 - 26 - Sep 6 price swing
- RES 2: $33.125/34.903 - High Nov 1 / High Oct 23 and the bull trigger
- RES 1: $30.891/32.338 - 50-day EMA / High Dec 12
- PRICE: $29.703 @ 07:03 GMT Dec 24
- SUP 1: $28.748 - Low Dec 19
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
A bear cycle in Silver that started Oct 23 remains in play and last week’s move lower reinforces the trend condition. The metal has breached support at $29.642, the Nov 28 low. The break lower opens $28.446, a Fibonacci retracement. Note that moving average studies are in a bear-mode position highlighting a dominant downtrend. Key resistance has been defined at $32.338, the Dec 12 high. A break of this level would signal a reversal.
BONDS: US 10yr Yield probes 4.60%
- Not much to discuss marketwise, EUREX is closed and as a reminder ICE/UK will be closing at 12.15GMT after futures open at 08.00GMT this Morning.
- The US will also be closing early (12.15ET) but Investors will continue to watch the Yield levels in the US and Europe when they reopen.
- The US 10yr Yield is still trading close to the 4.60% mark, which held last Week.
- Looking further out, next area of interest comes at 4.6357% in the 10yr, which would equate to 108.10.
- There are no Tier 1 data for Today and no Speakers.
