OIL: Mid-Day Oil Summary: Crude Slightly Higher
Dec-04 12:04
Crude prices tick higher again following net gains yesterday but still holding within the $61.6/bbl to $63.8/bbl range seen since Nov. 23. Geopolitical risks for Ukraine and Venezuela are supporting crude but projections for a record market surplus next year remain a concern.
- Brent FEB 26 up 0.4% at 62.92$/bbl
- WTI JAN 26 up 0.5% at 59.25$/bbl
- Ukrainian officials are scheduled to meet with US envoy Witkoff in Florida on Thursday. Trump said that Witkoff’s meeting with President Putin was “reasonably good”. Putin said that Russia hasn’t agreed with some point of the US peace plan, Tass said. Whether an agreement can be achieved remains highly uncertain.
- Concern surrounds ongoing Ukrainian strikes on Russian energy infrastructure. Ukraine hit the Druzhba oil pipeline in Russia's central Tambov region yesterday although supplies to Hungary continue as normal. The CPC aims to complete repairs on its third SPM ahead of schedule to return to full operation after an attack which damaged SPM 2 last weekend.
- Oil exports from Russia’s Black Sea ports of Novorossiysk and the CPC terminal fell around 1m tons short of schedule in November, as severe storms and recent drone attacks disrupted loading, Reuters reports.
- Turkey told Russia and Ukraine to keep energy infrastructure out of their conflict and wants energy flows to continue uninterrupted, Energy Minister Alparslan Bayraktar said.
- President Trump said that Venezuela drug cartels will be targeted and not just at sea.
- Saudi Aramco is set to make available condensate from its new Jafurah natural gas project, with loadings of the new grade expected to start sometime in early 2026, according to Argus reporter Nader Itayim.
- The Mediterranean medium-sour crude market is getting tighter as Turkey reduces Russian intake and with disruption to supplies of CPC and Urals, Kpler said cited by Bloomberg.
- If no Ukraine peace deal is reached then fears of disruptions from Russia and Ukraine energy infrastructure strikes causing supply tightness would ultimately keep Brent above $60/bbl, ANZ said cited by Reuters.
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PIPELINE: Corporate Bond Roundup: Supra Sovereigns on Tap Tuesday
Nov-04 11:54
- Date $MM Issuer (Priced *, Launch #)
- 11/04 $800M Breakwater Energy 5NC2 9%a
- 11/04 $500M #Sharjah Islamic Bank5Y Sukuk +95a
- 11/04 $Benchmark Hashemite Kingdom of Jordan 7Y 6.375%a
- 11/04 $Benchmark Lao People's Democratic Rep 5Y 11.25%a
- 11/04 $Benchmark Standard Chartered Perp NC10 7.375%
- 11/04 $Benchmark QBE Insurance 12NC7 +170a
- $40.7B Priced Monday, driven by Alphabet's $17.5B over 8 tranches and Novartis $6B over 7 tranches:
- 11/03 $17.5B *Alphabet: $1B 3Y +30, $500M 3Y SOFR+52, $2.5B +5Y +40, $1.25B 7Y +50, $3.5B 10Y +62, $2B 20Y +72, $4B 30Y +82, $2.75B 50Y +107 (massive debt issuance includes $6.5B over 6 tranches: 3Y, 6Y, 7Y, 13Y, 19Y and 39Y).
OUTLOOK: Price Signal Summary - Corrective Cycle In Oil Futures Still In Play
Nov-04 11:53
- On the commodity front, Gold is unchanged. A fresh cycle low last week 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 $3864.7. Clearance of this EMA would strengthen a short-term bear theme. Initial resistance is at $4161.4, the Oct 22 high.
- WTI futures remain in a corrective cycle for now. Note that price has recently traded through the 50-day EMA, currently at $61.05. 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.
FOREX: EURUSD Testing Below 1.15 as Current Bear Leg Extends
Nov-04 11:51
- EURUSD has been edging lower on Tuesday, extending the pair’s selloff following the breach of important 1.1542 support last Friday. Current price action signals scope for a more protracted move south, towards key support at 1.1392, the Aug 1 low.
- Price action has likely been assisted by the sharp reversal for EURJPY overnight, with the cross threatening a close below the 20-day EMA (intersects at 176.65). The 50-day EMA remains key for EURJPY, having not closed below the average since late May. It intersects today at 175.00.
- The single currency trades on a firmer footing against the likes of AUD and NZD, owing to the strong risk-off impetus across global markets today.
- SocGen think EURUSD would ‘run with’ any break below 1.15 or above 1.17, although their updated forecasts show they believe an upside move is more likely.
- Meanwhile, ING have noted that despite the hawkish repricing in the USD curve, the EUR/USD drop looks a bit overdone. They add that their short-term fair value model is now showing a 1% undervaluation, and with positioning now much more balanced, the pair can enjoy faster rallies on poor US jobs market news. ING remain optimistic on a rally into year-end to 1.18-1.20.
