OIL: Drone Strike on Primorsk Bullish for Near-Term Crude & Diesel: Platts
A Ukrainian drone strike on the Russian Baltic export hub of Primorsk Sep 12 which set fire to a tanker at berth, is bullish for near-term crude oil and diesel price sentiment, Platts said.
- “It remained unclear what size and type of tanker was hit, or if it was Russian owned, but the attack represents the first time Ukrainian drones have hit Primorsk shipping,” Platts added.
- There were also reports of a fire at a pumping station at the port, which, if true, could cause potential delays for berthing over the next few days.
- Russian exported around 1m b/d of crude from Primorsk in August, with September loadings already approaching 1m b/d, Platts data showed.
- Diesel loadings in September to date are at around 400,000 b/d, similar to August.
- The strike may cause tankers, Russian or non-Russian, to seek to avoid Primorsk due to the risk of attack.
- Condensate splitters at Ust Luga were hit by Ukrainian drones in late-August, Platts added.
- As of today, crude and diesel export facilities at the Russian Black Sea port of Novorossiysk have not been targeted.
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SOFR OPTIONS: Front vs Mid Call Spread
- SFRZ5 96.37/96.50cs vs 2QZ5 96.93/97.06cs, bought the front for -0.25 in 2.5k.
This was bought Yesterday for -0.5 in 2.5k.
STIR: Dovish Move In Fed Pricing Extends, Full Cut Priced For Sep
The dovish move in Fed pricing has extended a little since Tsy Secretary Bessent reiterated his call for a 50bp cut in September, along with stressing that the Fed Funds target range should be 150-175bp lower than it currently is (pointing to the potential for a “series” of rate cuts) and adding to the growing list of candidates to succeed Fed Chair Powell.
- A 25bp cut is now fully discounted come the end of next month’s FOMC, with 63.5bp of cuts priced through year-end.
- That compares to 24bp and 62bp pre-Bessent.
- SFRZ6 is 1.5bp above pre-Bessent levels.
- All of those contracts stick within their respective recent ranges.
US 10YR FUTURE TECHS: (U5) Holds Ground
- RES 4: 113-23 76.4% retracement of the Sep’24 - Jan’25 sell-off
- RES 3: 113-07 76.4% retracement of the Apr 7 - 11 sell-off
- RES 2: 112-23 High May 1
- RES 1: 112-15+ High Aug 5
- PRICE: 112-04 @ 14:29 BST Aug 13
- SUP 1: 110-19+/08+ Low Jul 24 / Low Jul 14 & 16
- SUP 2: 110-03 76.4% retracement of the May 22 - Jul 1 bull leg
- SUP 3: 109-28 Low Jun 6 and 11
- SUP 4: 109.25 Low May 27
Treasury futures spiked sharply on the CPI print, hitting 112-06 before fading into the close. Despite the intraday reversal off highs, the bullish theme persists, supported by the clearance of the bull trigger at 112-12+, the Jul 1 high, on the NFP reaction. Prices remain toward the upper-end of the range, keeping the May 1 high at 112-23, the next upside level. Clearance here opens retracement levels layered between 113-07 and 113-23. On the downside, key support is 110-08+, the Jul 14 and 16 low. First support lies at 110-19+, the Jul 24 low.
