OIL: Oil End of Day Summary: Crude Rises
Crude has rebounded back to levels seen late last week amidst signs of rising tensions in the Middle East, while the market continues to digest oversupply risks after OPEC+ decided on a large output hike for June.
- WTI JUN 25 up 3.4% at 59.08$/bbl
- EIA crude survey: -1.6m bbl (Bbg), -2.5m bbl (Reuters)
- The EIA has raised its forecast for global oil demand in 2025 by 0.1m b/d to 103.7m b/d, according to its May Short-Term Energy Outlook.
- Oil producers in the Permian basin are cutting their drilling at a faster pace after prices sunk below $60/b, threatening to choke supply, Bloomberg said.
- The IDF claimed the attack on May 6 destroyed Houthi infrastructure including a strike on the Sanaa International Airport and targets in the Hudaydah Port, BBC said.
- The 411k b/d OPEC output hike will add up not 50m bbl to onshore crude stocks outside of China by the year-end, Platts said.
- US President Trump said over the weekend that there could be a number of trade deals completed this week.
- Iran is scheduled to hold indirect nuclear talks with the US on May 11.
- Recent legislative developments and comments from the Trump administration suggest that the US may be inching toward new sanctions to motivate Russia to strike a peace deal, Platts reports.
- Urals FOB oil prices have stabilised below the G7 $60/bbl price cap, Reuters said.
- India has doubled its crude purchases from the US amidst higher availability of WTI cargoes owing to sluggish purchases by China, Platts said.
- Mexico’s Pemex is targeting a crude output of 1.58m b/d in 2025, according to Reuters, citing a filing to the U.S. Securities and Exchange Commission.
- Chevron’s operations in Kazakhstan, were a focal point of the Q1 2025 Earnings Call, highlighting significant operational and strategic progress.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUSSIE 10-YEAR TECHS: (M5) Strong S/T Bounce
- RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 1: 95.915 - High Apr 4
- PRICE: 95.860 @ 16:42 GMT Apr 04
- SUP 1: 95.420/95.300 - Low Feb 13 / Low Jan 14
- SUP 2: 95.275 - Low Nov 14 (cont) and a key support
- SUP 3: 94.640 - 1.0% 10-dma envelope
Aussie 10-yr futures extended a recent strong bounce through to the Friday close, putting prices through the top end of the recent range. The confirmed breach of 95.851, the Dec 11 high on the continuation contract, reinstates a bull cycle and focuses attention on resistance at 96.207, a Fibonacci retracement point. A stronger bearish theme would expose 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish condition.
USDCAD TECHS: Bearish Structure
- RES 4: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- RES 3: 1.4415 High Apr 1
- RES 2: 1.4308 50-day EMA
- RES 1: 1.4242 High Apr 4
- PRICE: 1.4196 @ 17:10 BST Apr 4
- SUP 1: 1.4028 Low Apr 3
- SUP 2: 1.3986 Low Dec 2 ‘24
- SUP 3: 1.3944 61.8% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 4: 1.3894 Low Nov 11 ‘24
USDCAD rallied Friday, but remains lower on the week after Thursday’s downleg. The move down has confirmed a clear reversal of the bull cycle between Sep 25 ‘24 and Feb 3. Price is through a key support at 1.4151, the Feb 14 low. This signals scope for an extension towards 1.3944, a Fibonacci retracement. On the upside, key short-term resistance is seen at 1.4308, the 50-day EMA.
CANADA DATA: Unexpected Jobs Contraction Boosts Implied April BOC Cut Chances
Canadian employment unexpectedly contracted in March, falling by the most since January 2022 at -32.6k (+10.0k expected, +1.1k prior) in a sign that the trade war with the US is spilling over increasingly into the "hard" data. The unemployment rate ticked up 0.1pp to 6.7%, in line with expectations and below the November 6.9% high, though unrounded it rose from 6.55% to 6.71% - the largest increase since November.
- The drop in employment was largely due to a 62.0k drop in full-time positions (after -19.7k, the 2nd straight drop), with part-time up for the 4th consecutive month at 29.5k (after 20.8k prior) - that mix is clearly indicative of hiring uncertainty among firms.
- The monthly full-time drop was the 2nd largest since the pandemic lows in the labour market (April 2020). Goods producing jobs fell by 12k (2nd consecutive decline), while services shed 21k (wholesale/retail trade and Information, culture and recreation led losses).
- The participation rate dipped 0.1pp to 65.2%.
- Wages were soft, dropping 0.2% M/M for the first drop since November, with the Y/Y rate slipping to 3.6% from 3.8% prior. The rise in permanent employees' wages of 3.5% Y/Y was well below the 4.1% expected (4.0% prior).
- Market-implied probability of an April BOC rate cut rose to as high as 68% after the data before settling the day at around 55%. That compares to 40% prior to Wednesday's US tariffs announcement.
