OIL: Mid-Day Oil Summary: Crude Extends Gains
Apr-05 10:53
Crude prices are extending the recent rally with front-month Brent crude trading well above $90/bbl at the highest since 23 October. Rising Middle East tensions, OPEC+’s continued output cuts and some signs of improved demand from economic data in the US and China are supportive.
- Brent JUN 24 up 0.4% at 91$/bbl
- WTI MAY 24 up 0.2% at 86.77$/bbl
- US nonfarm payrolls are due for release at 08:30 ET. Bloomberg consensus sees nonfarm payrolls growth of 213k in March after a strong 275k in Feb.
- Oil markets are being supported by geopolitical risks highlighted by RBC’s Helima Croft in her latest interview with CNBC.
- China’s seaborne crude imports came in above 10mn bpd in March – the first time since October of last year according to Vortexa.
- The Western Canada Select (WCS) heavy crude differential versus WTI traded in the $12 range on Thursday – little changed from the previous session.
- The reduction in Pemex’ crude oil export will be gradual as the firm is raising its refining capacity with the start up of the new 340kbpd Dos Bocas refinery, Mexican President Andrés Manuel López Obrador said Thursday, cited by Dow Jones.
- Not a single sanctioned Russia oil tanker has loaded a cargo since being added to US Treasury’s Office of Foreign Assets Control list according to Bloomberg.
- Iraq’s crude oil exports stood at 3.423mbpd in March, compared with 3.434mbpd in February, oil ministry data seen by Iraq Oil Report showed.
- TotalEnrgies’s 219kbpd Donges refinery will restart a unit on Friday, the company said in a statement.
- US Diesel cracks have seen a recovery this week up from 25.75$/bbl to 29.2$/bbl amid ongoing Russia refining disruption and a pause in the recovery in US utilisation rates. Demand is weak but there are some indications that the fuel could see increased demand from the manufacturing sector.
- US gasoline crack up 0$/bbl at 30.82$/bbl
- US ULSD crack up 0.2$/bbl at 29.17$/bbl
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US TSY FUTURES: OI Points To Mix Of Long Setting & Short Cover On Tuesday
Mar-06 10:49
The combination of yesterday's rally in Tsy futures and preliminary OI data points to a mix of net long setting and short cover across the curve on Tuesday.
- Net long setting seemed to be seen in TY, US & WN futures, while net short cover was seemingly seen in TU, FV & UXY futures.
- Net long setting was the dominant factor in broader net curve terms.
- A reminder that continued weakness in Apple shares and a relatively soft ISM services survey were seen as the major drivers of yesterday's rally.
| 05-Mar-24 | 04-Mar-24 | Daily OI Change | OI DV01 Equivalent Change ($) | |
| TU | 3,605,741 | 3,616,619 | -10,878 | -425,885 |
| FV | 5,804,285 | 5,814,427 | -10,142 | -438,067 |
| TY | 4,277,161 | 4,262,002 | +15,159 | +1,006,123 |
| UXY | 2,046,385 | 2,049,191 | -2,806 | -251,723 |
| US | 1,457,388 | 1,443,855 | +13,533 | +1,810,997 |
| WN | 1,588,231 | 1,586,455 | +1,776 | +376,564 |
| Total | +6,642 | +2,078,010 |
EUR: EUR/USD Meets Selling Interest Ahead of Key Resistance
Mar-06 10:49
- EUR/USD's intraday recovery (triggered by USD weakness, rather than broad EUR strength) has met some resistance at the daily high of 1.0880 as markets fail to build on gains above yesterday's 1.0876. Today's high is just short of key resistance and a notable upside level at 1.0888 - the top of the tail of a shooting star pattern printed on Feb 22, which continues to highlight a possible bearish reversal.
- The tail of the inverted hammer intersected with the 50-dma - a level pierced, but not convincingly broken in Tuesday trade.
- This raises focus on the heavier frequency of risk events over the next three days, with Powell's House/Senate testimonies on Weds/Thurs, the ECB decision on Thurs and NFP on Friday. A EUR negative, USD positive theme into the end of the week would raise focus on 1.0791 - the 50% retracement of the recovery bounce off Feb14's 1.0695.
- Below here, the bounce would be deemed corrective and could signal a resumption of the over-arching downtrend off the Dec28 high.
OUTLOOK: Price Signal Summary - S&P E-Minis Pullback Appears To Be A Correction
Mar-06 10:48
- In the equity space, the trend condition in S&P E-Minis remains bullish and the latest move lower appears to be a correction. Price action continues to highlight the fact that corrections are shallow - this is a bullish signal that highlights positive market sentiment. Support to watch is 5049.64, the 20-day EMA. A clear break of this average would signal potential for a deeper retracement towards 4935.76, the 50-day EMA. Sights are on 5170.86, the 2.236 projection of Nov 10 - Dec 1 - 7 price swing.
- EUROSTOXX 50 futures remains intact and Monday’s fresh cycle high reinforces this theme. Moving average studies remain in a bull-mode position and this set-up highlights positive market sentiment. Sights are on 4939.30 next, the 2.382 projection of the Nov 8 - 24 - 28 price swing. Initial firm support lies at 4816.80, the 20-day EMA.
