OIL: Crude Drifts Lower as China Crude Imports Rise
Crude markets are edging lower today as China crude imports rise. Prices rallied yesterday boosted by China’s Politburo sending a clear message that there will be further stimulus in 2025 while increased uncertainty in the Middle East also provided support.
- There is likely to be a moderate loosening of monetary policy in China next year with a more proactive fiscal policy resulting in the end to the 3% budget deficit ceiling.
- China's crude oil imports jumped 14.3% y/y to 48.52m metric tons in November for the first annual growth in seven months amid lower Middle East prices, stockpile additions and as refiners used up quotas.
- Middle East continues to be monitored closely as the toppling of Syria’s Bashar al-Assad's regime at the weekend has added to geopolitical uncertainty for oil markets.
- Supply/demand fundamentals are the focus with the release of the EIA Short-Term Energy Outlook today and OPEC and IEA report later this week.
- Diesel and gasoline cracks gained ground yesterday as diesel regained some of the losses from last week ahead of the US industry-based inventory data released later today and the official EIA figures on Wednesday.
- Brent FEB 25 down 0.4% at 71.82$/bbl
- WTI JAN 25 down 0.5% at 68.01$/bbl
- Brent FEB 25-MAR 25 down 0.01$/bbl at 0.29$/bbl
- Brent JUN 25-DEC 25 down 0.03$/bbl at 0.88$/bbl
- US gasoline crack down 0.1$/bbl at 13.41$/bbl
- US ULSD crack down 0.1$/bbl at 23.25$/bbl
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Historical bullets
JGB TECHS: (Z4) Bounce Reverses
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 146.53 - High Aug 6
- PRICE: 143.70 @ 16:14 GMT Nov 08
- SUP 1: 143.39 - Low Nov 07
- SUP 2: 142.23 - Low Jul 02
- SUP 3: 140.21 - 1.236 proj of Mar 22 - Nov 1 ‘23 - Jan 15 price swing
Prices fell further Thursday, extending the recent pullback. The return lower at the start of this week has culminated in a break of 143.57, marking both the Jul 17 high on the continuation contract as well as the Oct 22 low. For now, the 50-dma tops out at 144.32, and marks first resistance. A continuation higher would open 146.53, the Aug 6 high (cont) and a bull trigger.
US TSY FUTURES: BLOCK: Late 2Y/10Y Ultra-Bond Flattener
- Flattener crossed late Friday at 1645:30ET, DV01 $322,000
- -8,900 TUZ4 102-23.88, sell through 102-24.38 post time bid vs.
- +3,700 UXYZ4 113-16, post time offer
USDCAD TECHS: Trend Needle Points North
- RES 4: 1.4179 2.0% 10-dma envelope
- RES 3: 1.4000 Round number resistance
- RES 2: 1.3977 High Oct 13 and a key M/T resistance
- RES 1: 1.3959 High Nov 1 / 6
- PRICE: 1.3910 @ 16:29 GMT Nov 8
- SUP 1: 1.3836/22 20-day EMA and a key S/T support / Low Nov 6
- SUP 2: 1.3744 50-day EMA
- SUP 3: 1.3611 Low Oct 8
- SUP 4: 1.3567 Low Oct 7
USDCAD reversed course Wednesday and recovered from Tuesday's low. The trend outlook is unchanged, it remains bullish. Attention is the key resistance at 1.3946, the Aug 5 high. This hurdle has been pierced, a clear break would strengthen the uptrend and open 1.3977, the Oct 13 high and a key medium-term resistance point. Initial firm support to watch lies at 1.3836, the 20-day EMA.
