OIL PRODUCTS: Margins Hold Gains As IEA Show Lower EU and US Runs in Q3
US and European refining margins are holding onto gains from yesterday with support from US low inventory levels and potential for lower run rates. Throughput for oil refiners in Europe and the US will to be lower than previously expected in Q3 2023 after a drop in margins according to the IEA monthly oil report.
- The IEA Q3 OECD Americas forecast was revised down to 19mb/d from 19.4mb/d previously and OECD Europe revised to 11.5mb/d from 11.7mb/d previously.
- Global crude throughput was raised by 300kb/d for 2023 to 82.3mb/d compared to 80.5mb/d last year with growth led by China and India.
- Russian crude boosted record throughput in Asia in Q1 to increase product supplies and drive weaker margins. “New capacity and ample availability of discounted Russian crude in Asia skews activity away from the Atlantic Basin”
- IEA showed refinery runs in Russia were up 400kb/d from last month at 5.5mb/d signalling maintenance may have been deferred.
- EU’s chief diplomat Josep Borrell has said that the EU should crack down on India selling Russian oil as refined fuels into Europe.
- US 321 crack down -0.2$/bbl at 31.09$/bbl
- US gasoline crack down -0.4$/bbl at 32.22$/bbl
- US ULSD crack up 0.1$/bbl at 28.82$/bbl
- EU Gasoline-Brent down -0.4$/bbl at 17.2$/bbl
- EU Gasoil-Brent unchanged at 16.33$/bbl
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US: President Biden To Deliver Remarks At Rally In Ireland
US President Joe Biden is shortly due to address a crowd at a campaign-style rally in County Mayo, Ireland to conclude his three-day tour of Ireland.
- Livestream: https://www.whitehouse.gov/live/
- Reuters reports: “The tour, a celebration of his close links to his ancestral homeland and deep Catholic faith, has provided a preview of his planned 2024 re-election campaign, with enthusiastic flag-waving crowds, photo-ops with babies and long, loquacious speeches.”
AUDUSD TECHS: Fades Into Friday Close
- RES 4: 0.6921 High Feb 20
- RES 3: 0.6861 50.0% retracement of the Feb 2 - Mar 10 bear leg
- RES 2: 0.6824 High Feb 24
- RES 1: 0.6797 High Apr 13
- PRICE: 0.6712 @ 16:03 BST Apr 14
- SUP 1: 0.6685/6620 Low Apr 14 / 10
- SUP 2: 0.6590 Low Mar 15
- SUP 3: 0.6565/47 Low Mar 10 / 61.8% of the Oct - Feb bull cycle
- SUP 4: 0.6500 Round number support
AUDUSD topped the 50-day EMA convincingly on Thursday amid broad USD weakness. This works against the broader downtrend, leaving a break below 0.6565 - the Mar 3 low - a requirement for any resumption and continuation of the bear cycle. A continuation higher would open 0.6824, the Feb 24 high and 0.6861, a Fibonacci retracement. First support to watch is Thursday’s low at 0.6685. A breach would be seen as an early reversal signal.
US STOCKS: Real Yields Outweigh Initial Bank Optimism
- The S&P E-mini has pulled back off lows of 4138 but remains under pressure at 4149 at typing (-0.6%) as it unwinds half of yesterday’s push higher.
- It comes with the 10Y real yield pushing back towards session highs seen after retail sales, currently +5bps on the day with real yields behind most of the sell-off in nominal yields.
- Nasdaq trims earlier losses to see similar declines (-0.6%) whilst in banks, the KBW index (+0.7%) still sees striking contrast between large banks after positive earnings this morning and regionals currently -2.7%.
- North of the border, the TSX outperforms with 0.0%, with banks gaining +0.5%.
