NATGAS: Egypt Gas Production Falls to Lowest Since 2018
Egypt’s May natural gas production dropped to the lowest since February 2018 according to JODI data, as the former exporter becomes more reliant on LNG imports to help ease power shortages driven by air-conditioning demand.
- Egypt’s Petroleum Minister Karim Badawi said oil and gas production has dropped by 25% in the past three years partly due to an increase in arrears to foreign oil companies slowing down exploration and development.
- Zohr gas field production has dropped by about a third since 2019, according to Eni.
- Egypt has purchased around 21 LNG cargoes for summer delivery with 5 already received, the oil ministry said on July 15. They have also docked an FSRU at Ain Sokhna which allows for direct gas imports.
- Rolling blackouts in Egypt, that can last for up to three hours a day, will be suspended from July 21 until mid-September, Prime Minister Mostafa Madbouly said.
- Daily power consumption is up 12% from last year, reaching 37.5 GW/d as the government looks to cover additional power demand via renewable energy.
Source: Bloomberg
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US 10YR FUTURE TECHS: (U4) Bull Cycle Still In Play
- RES 4: 111-31 1.382 proj of the Apr 25 - May 16 - 29 price swing
- RES 3: 111-17+ 1.236 proj of the Apr 25 - May 16 - 29 price swing
- RES 2: 111-09 High Apr 1
- RES 1: 111-01 High Jun 14
- PRICE: 110-22+ @ 11:20 BST Jun 19
- SUP 1: 109-21+/109-00+ 50-day EMA / Low Jun 10 and key support
- SUP 2: 108-27+ Low Jun 3
- SUP 3: 108-09+ Trendline drawn from the Apr low
- SUP 4: 107-31 Low May 29 and a key support
A bull cycle in Treasuries remains in play and the contract continues to trade at its recent highs. Price has cleared resistance at 110-21, the Jun 7 high. The break has confirmed a resumption of the bull cycle that started Apr 25, and paves the way for an extension towards 111-17+, a Fibonacci projection. On the downside, key support to watch lies at 109-00+, the Jun 10 low. Clearance of this level is required to reinstate a bearish theme.
STIR: OI Points To Mix Of Long Setting & Short Cover In SOFR Futures On Soft Retail Sales
The combination of yesterday’s rally in most SOFR futures and preliminary OI data points to the following net positioning swings on Tuesday:
- Whites: Little net movement in SFRH4 positioning, net short setting in SFRM4, net long setting in SFRU4 and net short cover in SFRZ4.
- Reds: A mix of net short cover and long setting, with the former dominating in net pack OI terms.
- Greens: A mix of net short cover and long setting, with the latter dominating in net pack OI terms.
- Blues: Net long setting seemed to be seen in all contracts.
- Softer-than-expected retail sales data, coupled with negative revisions, provided the major input on Tuesday.
- That reintroduced some rate cut premium into markets, with FOMC-dated OIS showing ~44bp of ’24 cuts in late NY trade vs. ~41bp late on Monday.
| 18-Jun-24 | 17-Jun-24 | Daily OI Change | Daily OI Change In Packs | ||
| SFRH4 | 904,339 | 904,862 | -523 | Whites | +26,062 |
| SFRM4 | 1,240,596 | 1,200,808 | +39,788 | Reds | -13,014 |
| SFRU4 | 1,141,470 | 1,133,941 | +7,529 | Greens | +14,117 |
| SFRZ4 | 983,657 | 1,004,389 | -20,732 | Blues | +25,179 |
| SFRH5 | 815,188 | 816,088 | -900 | ||
| SFRM5 | 713,887 | 730,602 | -16,715 | ||
| SFRU5 | 625,820 | 621,338 | +4,482 | ||
| SFRZ5 | 807,455 | 807,336 | +119 | ||
| SFRH6 | 567,984 | 572,473 | -4,489 | ||
| SFRM6 | 483,973 | 472,041 | +11,932 | ||
| SFRU6 | 419,663 | 414,698 | +4,965 | ||
| SFRZ6 | 358,115 | 356,406 | +1,709 | ||
| SFRH7 | 250,252 | 250,228 | +24 | ||
| SFRM7 | 208,445 | 193,582 | +14,863 | ||
| SFRU7 | 185,213 | 175,345 | +9,868 | ||
| SFRZ7 | 164,084 | 163,660 | +424 |
LOOK AHEAD: Wednesday Data Calendar: Juneteenth Holiday
Wednesday data limited to MBA Mortgage Applications at 0700ET and NAHB Housing Market Index at 1000ET.
- Otherwise, Wednesday is a Federal Holiday: "Juneteenth", to commemorate the ending of slavery.
- Cash Treasury market and stock exchanges are closed, along with open outcry pits in Chicago but equity and rate futures will be open for an abbreviated trading session on the electronic trading systems.
- Equity and FI futures will close at the same time at 1300ET.
