OIL: Oil End of Day Summary: Crude Falls
Oil prices have lost ground in US hours, as Mideast tensions wane and headlines suggest limited optimism for US-China trade war progress.
- WTI JUN 25 down 1.9% at 57.95$/bbl
- EIA Weekly US Petroleum Summary - w/w change week ending May 02: Crude stocks -2,032 vs Exp -1,632, Crude production -98, SPR stocks +580, Cushing stocks -740
- Risks of rising Middle East tensions from reports of Israeli military strikes on Yemen yesterday helped to offset surplus concerns from rising OPEC supply.
- Trump said on Tuesday the bombing of Yemen will stop as a ceasefire with the Houthis is brokered via Oman, in a move he said will stop attacks on ships.
- Major shipping companies are hesitant to resume Red Sea transits, awaiting proof that the ceasefire announced on May 6 will end Houthi attacks, Platts said.
- US-China trade talks will occur this week. US Treasury Secretary Bessent noted that current tariff levels are “unsustainable” and that de-escalation with China needs to occur before they “can move forward”.
- Headlines on Bloomberg said that Trump said there is no potential for pulling back tariffs on China, and that the President is unwilling to cut tariffs on Beijing to bring them to the table.
- Iraq has boosted its condensate output to around 160k b/d amid associated gas capture efforts, Reuters reports citing Iraq’s Minister of Oil.
- ARA crude stocks rose by 4.2% in the week ended May 2 to 49.75mbbl, according to Genscape cited by Bloomberg.
- Concerns over potential supply disruptions amid tightening US sanctions and lower oil prices prompt stockpiling by Chinese majors, while sanctioned crude imports remain near record highs, according to Vortexa.
- MNI Commodity Weekly: OPEC+ Keeps Pressure on Oil: Download Full Report Here
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Historical bullets
EURGBP TECHS: Clears Key Resistance
- RES 4: 0.8628 1.500 proj of the Mar 3 - 11 - 28 price swing
- RES 3: 0.8604 1.382 proj of the Mar 3 - 11 - 28 price swing
- RES 2: 0.8593 High Aug 14 ‘24
- RES 1: 0.8580 High Apr 7
- PRICE: 0.8571 @ 16:49 BST Apr 7
- SUP 1: 0.8432/0.8380 Low Apr 4 / 20-day EMA
- SUP 2: 0.8316 Low Mar 28 and a key near-term support
- SUP 3: 0.8299 Low Mar 5
- SUP 4: 0.8251 Low Mar 4
EURGBP maintains a bullish tone. The latest rally has resulted in a break of key resistance at 0.8474, the Jan 20 high. Clearance of this hurdle highlights an important technical breach and strengthens a bullish condition. Sights are 0.8593 next, the Aug 14 ‘24 high. On the downside, firm support lies at 0.8380, the 20-day EMA. The contract is overbought, a pullback would allow this condition to unwind.
EURGBP TECHS: Clears Key Resistance
- RES 4: 0.8628 1.500 proj of the Mar 3 - 11 - 28 price swing
- RES 3: 0.8604 1.382 proj of the Mar 3 - 11 - 28 price swing
- RES 2: 0.8593 High Aug 14 ‘24
- RES 1: 0.8580 High Apr 7
- PRICE: 0.8571 @ 16:49 BST Apr 7
- SUP 1: 0.8432/0.8380 Low Apr 4 / 20-day EMA
- SUP 2: 0.8316 Low Mar 28 and a key near-term support
- SUP 3: 0.8299 Low Mar 5
- SUP 4: 0.8251 Low Mar 4
EURGBP maintains a bullish tone. The latest rally has resulted in a break of key resistance at 0.8474, the Jan 20 high. Clearance of this hurdle highlights an important technical breach and strengthens a bullish condition. Sights are 0.8593 next, the Aug 14 ‘24 high. On the downside, firm support lies at 0.8380, the 20-day EMA. The contract is overbought, a pullback would allow this condition to unwind.
BONDS: Gilts Creeping Back Toward Shorts; OATs, BTPs Little Changed (2/2)
For non-German contracts, structural positioning remains flat/short:
- OAT: OAT remains in short structural positioning, having entered that territory after being "flat" for most of February. Last week's trade was indicative of long setting.
- GILT: Gilt structural positioning remains flat, where it has been the last 7 months, but is now as close to "short" as it's been since early January. Last week some some shorts set.
- BTP: BTP has now been flat since late January, though has ticked a little bit closer to "long" territory in the last week or so following some long-setting.
