AMERICAS OIL: Diesel cracks driven by refinery outages and war damage – EIA
Dec-04 13:50
Diesel cracks driven by refinery outages and war damage – EIA
- EIA notes global diesel margins have widened since late October and increased to their highest level all year, following refinery outages in Russia and in the Middle East and new sanctions on Russia’s crude oil.
- This was most notable in the Atlantic Basin, where higher prices were manifest at the Amsterdam, Rotterdam, Antwerp (ARA) shipping hub, in addition to New York Harbor and the US Gulf Coast. US markets were impacted because US refiners can sell in both domestic and international markets.
- Diesel crack spreads rose from mid-October to mid-November, with spreads in New York Harbor, the US Gulf Coast, and the ARA all rising above $1/gal for the first time in over a year.
- A significant factor has been EU sanctions against Russia, which were tightened on the major Russian oil companies Rosneft, Lukoil, and Gazprom Neft in October.
- The latest sanctions targeted refineries in Türkiye and India, which have been processing discounted crude oil from Russia and exporting refined products, including diesel, to the EU.
- Also, Ukrainian attacks on Russian refinery and petroleum export facilities have minimized Russian product exports.
- Other factors include the ongoing outage at Kuwait’s Al Zour refinery since late October and the progress of refinery maintenance at the large Dangote refinery in Nigeria.
- EIA concludes that sustained international demand amid constraints on international supply have heightened demand for products from refiners that remain operational. This list includes refiners on the US Gulf Coast, suppliers of most US petroleum product exports.
- US gasoline exports have risen to their highest levels so far this year, according to EIA’s Weekly Petroleum Status Report and shipping data from Vortexa.
- US distillate fuel oil exports have also been high in November, relative to the five-year (2020–24) average.
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AUD: More AUD Calls on the CME
Nov-04 13:44
More AUD Call sellers on the CME (multiple clips):
- AUDUSD (5th Dec) 66.50c, sold at 0.11 in 2.9k.
- AUDUSD (5th dec) 67.00c, sold at 0.06 and now 0.05 in 2.5k total
US TSY OPTIONS: Dec'25 2Y Broken Put Condor
Nov-04 13:40
- 10,000 TUZ5 103.87/104.37/104.5/104.87 broken put condors ref 104-05.5 to -05.62, 7.5 net
FOREX: Key AUDNZD Resistance in Focus Ahead of NZ Employment Data
Nov-04 13:37
- AUDNZD had two separate bouts of strength early Tuesday, with both rallies stalling just ahead of key medium-term resistance at 1.1491. We have highlighted that a break of this level would place the cross at its highest point since 2013, with plenty of attention on the level/1.1500 ahead of NZ employment data, which highlights the APAC calendar on Wednesday.
- Filled jobs for the quarter signal a stabilisation, but employment is likely to have remained weak, with consensus forecasting it to rise only 0.1% q/q to be still down 0.2% y/y. The unemployment rate is expected to rise 0.1pp to 5.3%, in line with the RBNZ's August projections. Soft labour demand is likely to weigh on private wage growth, which is forecast to rise around 0.4% q/q after 0.6%.
- JP Morgan have emphasised that NZD positioning, for systematics in particular, still screens very short Kiwi, and that a tactical long into the data makes a lot of sense to them. This view is highlighted by the fact JPM’s economics team think the NZ economy is primed for a recovery as business surveys begin to show signs of stabilisation.
- With the RBA out of the way, and given the cross has been closely following 2y rate spreads over the past couple of weeks, AUDNZD shorts would be their pick.
- The initial target for a correction lower is seen at the 20-day EMA, at 1.1373, before more meaningful support just below the 1.13 mark.
