OIL: Crude Edges Higher but Within Recent Range
Nov-21 07:37
Crude is edging higher today as concerns over an escalation in the Russia-Ukraine war and a slightly weaker US dollar are set against pressure from a small build in US crude inventories.
- Upside moves are limited by concerns for consumption in China and risk of an oil market surplus next year amid potential rising OPEC and non-OPEC supply.
- China’s oil product demand is set to decline 2% this year as new EVs and LNG trucks displace 50m tons, CNPC said cited by Bloomberg.
- US crude inventories yesterday rose to the highest since early August driven by higher Gulf Coast imports although partly offset by a further recover in exports. A drop in production back to 13.2mb/d was offset by an unexpected fall in refinery runs.
- In the Middle East efforts remain ongoing to find a ceasefire between Hezbollah and Israel.
- Gasoline crack spreads have extended their rally which began Nov. 14 although have fallen back with the expiry of the WTI Dec24 contract. Gains are despite a dip in US implied demand and an unexpected US stock build yesterday.
- Brent JAN 25 up 0.8% at 73.4$/bbl
- WTI JAN 25 up 0.9% at 69.38$/bbl
- Brent JAN 25-FEB 25 up 0.02$/bbl at 0.34$/bbl
- Brent JUN 25-DEC 25 up 0.05$/bbl at 0.98$/bbl
- US gasoline crack down 0.3$/bbl at 14.33$/bbl
- US ULSD crack down 0$/bbl at 25.14$/bbl
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
CROSS ASSET: USDJPY recovers back towards 151.00
Oct-22 07:32
- While the Dollar trades on the backfoot in early trade across G10s, the USDJPY is heading back towards the 151.00 (printed 151.10 high overnight), as Govies see another round of sellers in Treasuries and EGBs in decent early Volumes.
- As mentioned on the Open, the next support area of interest in TYZ4 would be at at 111.00, while in Yield terms, there's very little resistance until 4.30%, which equate to circa 110.25+ today.
GILTS: Futures Pierce First Support, Bailey Due Today
Oct-22 07:27
Gilt futures (Z4) are -46 ticks at 96.76, after piercing the first support at 96.97 (Oct 15 high) at the open.
- Technically, a bear cycle remains present, focusing attention on key support at 95.83, the Oct 10 low.
- September public finance data saw PSNBex GBP0.9bln below consensus at GBP16.6bln (but still GBP1.5bln above the OBR's forecast). These data are too close to the OBR's next forecast round to be included in their updated forecasts, and they point to the data being broadly in line with where it was previously reported.
- BoE Governor Bailey’s speech at 1425BST/1525CET headlines today’s domestic calendar. See our earlier STIR post and the Gilt Week Ahead publication for more colour.
- The Gilt curve has steepened, with cash yields 2-3.5bps higher. The 10-year Gilt/Bund spread is 0.5bps wider at 186bps.
- GBP900mln nominal of the long 20-year 0.625% Mar-45 linker is on offer today. Bidding deadline at 1000BST.
- We will follow with a round-up of this morning’s budget news in due course.
SCHATZ: Swap related trade
Oct-22 07:24
Schatz Swap related trade, suggest payer:
- DUZ4 ~2.5k at 106.84.
