OIL TECHS: Mid-Day Oil Summary: Oil Rangebound
Dec-12 12:23
Crude is largely rangebound on the day, holding most of yesterday’s gains. Support comes from the risk of additional sanctions on Russia and Iran
- Brent FEB 25 down 0% at 73.51$/bbl
- WTI JAN 25 up 0.1% at 70.37$/bbl
- The OPEC+ delay has materially reduced supply, but the market is still expected to be oversupplied by 1.4mb/d if barrels are returned from April as planned, according to the IEA monthly oil report.
- The IEA lowered 2024 demand growth to 840kb/d but raised the 2025 oil demand growth forecast to 1.1mb/d from 990kb/d projected last month.
- The US considers further restrictions on Russian oil and Trump’s pick for national security advisor suggests maximum pressure on Iran while the EU targets additional sanctions at Russia’s shadow tanker fleet.
- The WTI discount to Brent is the narrowest since Sept. 30 after EIA data yesterday showed Cushing stocks falling below the seasonal five-year range lows.
- OPEC lowered its annual demand growth to 1.61m b/d for 2024, down 210k b/d compared to last month’s assessment amid slowing China demand.
- Black Sea CPC Blend November loadings increased 11% m/m to 4.965m metric tons (1.31mbpd) in November from 4.632m tons in October, according to Reuters.
- Mexico’s Pemex offshore oil platforms halted operations on Wednesday and all crude-exporting terminals halted operations due to bad weather, according to a statement cited by Bloomberg.
- Saudi Arabia’s’ crude flows to China are set to rebound to the highest since October at about 46 million barrels in January according to Reuters sources.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
CROSS ASSET: A new low for US Treasuries, USDJPY breaks session high.
Nov-12 12:12
- US Treasuries are seeing a small pickup in Volumes as they push through new intraday low, latest order flow sees 4k sold in TY, 1k in USA, all cumulative volumes.
- On this side of the Pond, BTP in 2k and OAT in 1k.
- The resistance noted in Bund at 132.73 has held, as well as the 2.30% Yield level, and the German contract, similar to Yesterday, is seeing a two way price action.
- Initial support in US TYZ4 comes at 109.14.
- The USDJPY breaks through the high, taking its cue from the move higher in US Yield, but initial resistance is further out, up to 154.71.
OUTLOOK: Price Signal Summary - Bunds Pierce Resistance
Nov-12 12:08
- In the FI space, Bund futures traded higher Monday and the contract remains above its recent lows. Gains are - for now - considered corrective. The trend direction is down and last Wednesday’s break to a fresh cycle low reinforces this theme. The 131.00 handle has been cleared, signalling potential for 129.99, the 1.236 projection of the Oct 1 - 10 -16 price swing. Initial key resistance is at 132.52, the 20-day EMA (pierced). A clear break of it would be seen as an early bullish development. This would expose 133.10, the 50-day EMA.
- A bearish trend condition in Gilt futures remains intact and short-term gains are considered corrective. The contract has recently breached 92.99, a 2.00 projection of the Sep 17 - 30 - Oct 1 price swing. This signals scope for an extension towards 92.23, the 2.236 projection. The Oct 30 high of 96.65, is seen as a key short-term resistance where a break is required to highlight a possible base. Initial resistance is 94.73, Nov 1 high.
PIPELINE: US$ Corporate Debt Issuance Returns
Nov-12 12:00
Corporate issuance resumes as the latest earnings cycle winds down (not to mention the backlog of sidelined parties due to the FOMC and Presidential Election). Issuance estimated at appr $35B for the week.
- Date $MM Issuer (Priced *, Launch #)
- 11/12 $Benchmark HSBC 4NC3 fix/SOFR, 6NC5 fix/SOFR, 11NC10 +175a
- 11/12 $Benchmark Republic of South Africa 12Y 7.4%a, 30Y 8.25%a
- 11/12 $Benchmark People's Republic of China 3Y, 5Y estimated at up to $2B between the two tranches, Bbg reported the sale will take place in Riyadh as China looks to deepen financial ties with Saudi Arabia. A long list of bookrunners includes: BOC, BKCOMM, Agricultural Bank of China, BofA, CCB, CICC, C, CA-CIB, DB, FAB, GS, HSBC, ICBC, JPM, Mizuho, StanChart
