OIL PRODUCTS: Mid-Day Oil Products Summary: Cracks Slightly Higher
Dec-05 12:10
Cracks are slightly higher on the day as the market assesses overnight Ukrainian strikes on Russian energy infrastructure, though remain well below highs seen in November.
- US ULSD crack up 0.8$/bbl at 38.36$/bbl
- US gasoline crack up 0.2$/bbl at 17.18$/bbl
- US 321 crack up 0.4$/bbl at 24.24$/bbl
- EU Gasoil-Brent up 0.6$/bbl at 24.72$/bbl
- EU Gasoline-Brent up 0.4$/bbl at 13.31$/bbl
- The Gasoil-Brent spread has fallen back from a high of over $36/bbl on Nov. 18 to the lowest since mid-October around 24.7$/bbl. The crack is still high relative to levels seen this year prior to mid-October.
- Refining margins are expected to stay supported in Q1 but ease from Q2 onwards after the market adjusts to new sanctions, FGE NexantECA said.
- Ukraine has claimed the overnight attacks on the Syzran refinery and Temryuk seaport, and adds that recent attacks on the Saratov refinery led to a ‘complete’ suspension of primary crude oil processing.
- China’s small independent refineries are set to keep benefiting from cheap sanctioned crude supplies in 2026, but their buying remains limited by government-set import quotas, Platts said
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MNI: US MBA: MARKET COMPOSITE -1.9% SA THRU OCT 31 WK
Nov-05 12:00
- MNI: US MBA: MARKET COMPOSITE -1.9% SA THRU OCT 31 WK
EGBS: OATs The Risk Proxy Of Choice, Limiting Recovery In SPGB/OAT/PGB Fly
Nov-05 11:58
The SPGB/OAT/PGB butterfly is off all-time lows, but the bounce has been limited and has already started to fade as weakness in equity markets weighs on OATs in RV terms.
- OATs have become more of a risk proxy given France’s ongoing fiscal deterioration and political risk premium.
- This contrasts with the positive fiscal dynamics and sovereign rating trajectories for Spain and Portugal, and the clear differentiation continues to hamper French paper on this structure.
- Ongoing French political risks and prolonged Budget uncertainty only deepen downside risks for OATs here, particularly with no clear outcome in sight at this stage.
- Note that the latest local media reports point to French PM Lecornu being set to offer concessions to the Socialist Party in order to advance the social security budget (covered by our political risk team recently), although it is uncertain whether the offer will actually be tabled/accepted.
Fig. 1: 10-Year Spain/France Portugal Butterfly
Source: MNI - Market News/Bloomberg Finance L.P.
OUTLOOK: Price Signal Summary - Gold Support At The 50-Day EMA Remains Exposed
Nov-05 11:51
- On the commodity front, a fresh cycle low last week in Gold highlights an extension of the bear cycle that started Oct 20. The retracement since Oct 20 has allowed an overbought trend condition to unwind. The 20-day EMA has been breached, signalling scope for a test of the 50-day EMA, at $3867.3. Clearance of this EMA would strengthen a short-term bear theme. Initial resistance is at $4161.4, the Oct 22 high.
- WTI futures are unchanged and the contract remains in a corrective cycle for now. Note that price has recently traded through the 50-day EMA, currently at $61.03. The breach of this EMA signals scope for a stronger recovery. Note too that a resistance at $62.34, the Oct 8 high, has also been pierced. A clear move through it would expose key resistance at $65.77, the Sep 26 high. First key support and the bear trigger is unchanged at $55.96, the Oct 20 low.
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