OIL: Crude Holding Most Gains Amid Supply Concern Following Sanctions
Crude futures and time spreads have softened slightly but holding most of the gains seen yesterday. Crude is set for the strongest week since June after the announcement of US sanctions on Russia's Rosneft and Lukoil, in efforts to cut off revenue to Russia and limit its ability to continue the war in Ukraine.
- Indian refiners have indicated that the latest sanctions will severely impact their ability to continue to buy Russian oil.
- India’s top refiner Reliance said it will “recalibrate” Russian oil imports in line with government guidelines following Trumps targeted measures towards Rosneft and Lukoil. Reliance purchased several Middle East crude grades for delivery in Dec or Jan. amid concern for disruption to flows.
- The EU also introduced with new sanctions including targeting the Russian shadow fleet, a crack down on Russian crypto financing and a ban on LNG imports into Europe from 2027.
- Chinese state-owned companies including Sinopec paused some purchases of spot cargoes, mostly ESPO, after the sanctions, adding to signs of disruption in the market, Bloomberg said.
- US sanctions have prevented NIS from receiving a crude cargo that could have bought time for Serbia's refinery, which will be forced to stop processing without new supplies, Reuters said.
- Marathon’s 631kb/d Galveston Bay refinery is restarting the FCCU and Ultracracker unit (HCU), Reuters sources said.
- Brent DEC 25 down 0.4% at 65.72$/bbl
- WTI DEC 25 down 0.4% at 61.53$/bbl
- Brent DEC 25-JAN 26 up 0.01$/bbl at 0.71$/bbl
- Brent DEC 25-DEC 26 down 0.12$/bbl at 2.31$/bbl
- EU Gasoline-Brent up 0.1$/bbl at 14.37$/bbl
- EU Gasoil-Brent down 0.4$/bbl at 26.92$/bbl
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Historical bullets
EURJPY TECHS: Fresh Cycle High
- RES 4: 177.08 2.000 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 3: 175.43 High Jul 11 ‘24 and a key medium-term resistance
- RES 2: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 1: 174.65 Intraday high
- PRICE: 174.58 @ 07:28 BST Sep 24
- SUP 1: 173.26/172.03 20- and 50-day EMA
- SUP 2: 170.97 Low Aug 14
- SUP 3: 169.73/45 Low Jul 31 / 23.6% of the Feb 28 - Jul 28 bull leg
- SUP 4: 168.46 Low Jul 1
The trend set-up in EURJPY is unchanged, it remains bullish and the cross has today traded to a fresh cycle high. This confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull-mode too, highlighting a dominant uptrend. Sights are on 174.86, a Fibonacci projection. On the downside, first support to watch lies at 173.26, the 20-day EMA
USD: AUDNZD is the chart to watch
- The Dollar is showing in the green against almost all G10s going into the European session, a positive past Weeks for the Greenback overall, albeit more mixed for the past Month and still deep in the red YTD (Year To Date).
- The standout overnight mover is the Aussie, the only Currency that is up following the Australian CPI beat Overnight.
- The AUDUSD chart isn't that interesting at current levels, instead immediate focus should be on the AUDNZD.
- AUDNZD has broken above 1.1300 and is finding further upside demand to trade at is highest level since October 2022, and noted the next resistance circa 1.1348 Yesterday.
- A clear break through the latter opens to 1.1408, then 1.1448 (retrace) and finally the big Psychological 1.1500, although most will be pointing out that 1.1491 is the 2022 high and highest printed level since October 2013.
WTI TECHS: (X5) Still Looking For Weakness
- RES 4: $76.89 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $74.79- 2.500 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $73.39 - High Jun 23 and a bull trigger
- RES 1: $65.43/68.43 - High Sep2 / High Jul 30 and key resistance
- PRICE: $63.52 @ 07:13 BST Sep 24
- SUP 1: $60.85 - Low Aug 13 and the bear trigger
- SUP 2: $57.50 - Low May 30
- SUP 3: $54.89 - Low May 5
- SUP 4: $54.10 - Low Apr 9 and a key support
The trend condition in WTI futures is unchanged - a bear cycle remains intact and short-term gains are considered corrective. The pullback from the Sep 2 high highlights a possible reversal and the end of a corrective phase between Aug 13 - Sep 2. Initial resistance to watch is $65.43, the Sep 2 high. Key short-term resistance has been defined at $68.43, the Jul 30 high. A stronger resumption of weakness would open $57.50, the May 30 low.
