OIL: Oil End of Day Summary: Crude Moderates Rally
Jan-14 19:24
Brent crude prices have fallen today as prices readjust following the rally to $81.68/bbl yesterday. Recent gains have been driven by fresh US sanctions on Russia.
- WTI FEB 25 down 1.4% at 77.7$/bbl
- The Wall Street Journal reports that President-elect Donald Trump is preparing a set of energy-related executive orders, to sign upon his inauguration on January 20, that would unwind Biden administration rules on offshore/onshore drilling on federal lands, tailpipe emissions, and LNG exports approval.
- The EIA has cut its forecast for global oil demand in 2025 by around 0.2m b/d to 104.1m b/d, according to its January Short-Term Energy Outlook.
- A survey by the WSJ found that US crude oil inventories likely fell for the eighth week, down 1.1m bbl to 413.5 million bbl in the week ended Jan 10.
- US CPI data will be in focus this week as a rise in core inflation could threaten further Federal Reserve interest rate cuts this year.
- Chinese state oil buyers are increasingly moving towards barrels from other regions due to tighter sanctions on Russia.
- India's near-term oil supplies are unlikely to be affected by sanctions on Russian oil due to a two-month winding down period, senior officials told Platts
- Russia’s largest shipping company said the latest U.S. sanctions will create operational complications, but it is working to minimize the negative effects.
- US, the largest crude exporter in the Americas, saw its seaborne exports average 3.9mbd in 2024, lower in comparison to 4mbd in 2023 according to Vortexa.
- Russia’s seaborne crude shipments were relatively unchanged last week with a drop of just 20kb/d in the week to Jan. 12 to 3.01mb/d, according to Bloomberg.
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MACRO ANALYSIS: MNI US Macro Weekly: Inflation Data Keep Fed Cut On Track
Dec-13 21:13
We have published and e-mailed to subscribers the MNI US Macro Weekly offering succinct MNI analysis across the range of macro developments over the past week. Please find the full report here:
USDCAD TECHS: Fresh Cycle High
Dec-13 21:00
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4236 @ 16:38 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
US TSYS: Extending Late Session Lows, Curves Bear Steepen Ahead Next Wed's FOMC
Dec-13 20:40
- Treasuries traded steadily lower throughout Friday's session, initially mirroring weak action in Bunds and Gilts. By the close, the Mar'25 10Y contract slipped to 109-26 (-18) the lowest level since November 22, 10Y yield rising to 4.4046% high (+.0768).
- Initial technical support at 109-22 (76.4% Nov 15 - Dec 6 Upleg) followed by 109-20 (Low Nov 20/21).
- Curves bear steepened: 2s10s +2.272 at 15.568 as short end rates outperformed ahead of next week's FOMC policy announcement where another 25bp rate cut was expected but not certain amid current macro and political uncertainty. That said, the latest unemployment and inflation data have kept the FOMC on track to cut the federal funds rate by 25bp (to 4.25-4.50%) next Wednesday.
- Projected rate cuts into early 2025 look near steady to lower vs. this morning levels (*) as follows: Dec'24 cumulative -24.3bp (-23.7bp), Jan'25 -28.6bp (-29.6bp), Mar'25 -42.2bp (-43.9bp), May'25 -48.4bp (-50.5bp).
- No reaction to this morning's import/export prices, Monday brings flash S&P Global PMIs, Retail Sales, IP & Cap-U on Tuesday.
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