OIL: Drone Strike on Primorsk Bullish for Near-Term Crude & Diesel: Platts

• 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.

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.

• 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.