OIL: Oil End of Day Summary: Crude Climbs
Dec-03 19:22
Crude has climbed to its highest since Nov. 25 today. Support is driven by further expectations of an OPEC+ rollover to cuts, coupled with Middle East ceasefire instability.
- Brent FEB 25 up 2.7% at 73.77$/bbl
- WTI JAN 25 up 2.9% at 70.08$/bbl
- OPEC+ is making progress on a three-month delay to its oil production hike according to Bloomberg sources.
- Four Reuters sources said that OPEC+ is likely to extend its latest round of output cuts until the end of Q1.
- Netanyahu comments on ceasefire: "We are enforcing this ceasefire with an iron fist, acting against any violation - minor or serious."
- US crude oil inventories change forecast: -1.38m bbl (Bbg), -1.2m bbl (WSJ), -1m bbl (Macquarie), +0.7m bbl (Reuters).
- Canadian heavy WCS crude prices could fall below $40/bbl in 2026 if President-elect Trump implements the promised 25% tariffs, Goldman Sachs said.
- Venezuela’s oil exports jumped in November on higher sales to its mainstay Asia customers, approaching 1m b/d, Reuters said citing LSEG data.
- China’s crude imports rebounded to a 13-month high in November. Vortexa onshore crude storage shows that the increase in volumes have supported inventory builds.
- Iran’s energy shortage has neared a point of crisis due to a continuous decline in oil output amid US sanctions, President Masoud Pezeshkian said, cited by Platts.
- Russian western port oil loadings are seen down to 1.72m b/d over December 1-10, Reuters said.
- Spot Russian ESPO premiums for China are at their highest since the Ukraine war began, Reuters said.
- Repairs at the Tengiz field have not been completed by the previously planned date and the works are continuing, the Kazakh Ministry of Energy said, cited by Interfax.
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US: Biden Remarks In Philadelphia Underway Shortly
Nov-01 20:31
US President Joe Biden is shortly due to deliver remarks in Philadelphia, Pennsylvania on his administration's "historic support for unions". LIVESTREAM
- The speech is a rare forray for Biden into presidential election swing states, with the Harris campaign reportedly preferring to keep distance from the President. A speech in critcal Pennylvania, and another event planned for Saturday, may suggest that Harris has calculated that Biden's appearance may help shore up some blue-collar votes in a state the president retains high levels of support.
- However, considering a recent gaff, Biden's comments will be closely scrutinsed by the press and Republican operatives for any remarks that can be used in last-minute campaign material.
- CNN noted: "More broadly, a Biden comment that will be portrayed by pro-Trump media as contempt for the ex-president’s supporters came at exactly the moment that Harris is trying to come across as a unifying figure to win over Republicans who are disaffected with Trump’s extremism but are not yet ready to take the leap to vote for a Democrat."
- The Washington Examiner notes, in an article summarising the various problems Biden has caused Harris: "The president, now entering his final few months in the White House, may have more trouble with the errant comments. The Associated Press reported Thursday that the White House press office altered the stenographed transcript in a bid to clean up what Biden had said."
US TSY OPTIONS: BLOCK: Large Dec'24 5Y Call Spread
Nov-01 19:59
- 28,591 FVZ4 107.5/109.5 call spreads, 22 vs. 106-30.5/0.30% at 1551:32ET
US TSYS: Late Treasury Roundup: Ignoring Jobs Data, Yields Climb Ahead Election
Nov-01 19:34
- Curves maintained steeper profiles late Friday, despite Treasury futures gradually reversing this morning's post NFP-tied bid. Fast two-way trade reported as Treasury futures briefly extended lows than rebound gap higher after the latest employment report shows much lower than expected jobs gain and down revision to prior, unemployment rate in-line with expectations.
- Support evaporated after higher than expected S&P Global US Manufacturing PMI, Construction Spending and ISM prices paid data. After the bell, the Dec'24 10Y contract trades through round number support to 109-31.5 (-15.5) while curves hold steeper levels -- reflecting improved rate cut expectations on the day: 2s10s +4.592 at 15.594 (vs. 7.660 low), 5s30s +3.035 at 34.538 (vs. 28.331 low). After
- Projected rate cuts into early 2025 held firmer vs. late Thursday levels (*): Nov'24 cumulative at -24.6bp ( -23.5bp), Dec'24 -45.9bp (-42.8bp), Jan'25 -59.2bp (-58.1bp), Mar'25 -74.8bp (-75.0bp).
- Greenback initially weakened across the board after the lower-than-expected headline, but the murky details around industrial action and hurricanes likely containing the market fallout here. The USD reversed course throughout the session, terminal rates in the US stronger climbs on the week which contributed to the strong dollar reversal on Friday, with the USD index looking to close the week broadly unchanged around 104.25.
- Looking ahead, the US Presidential Election on Tuesday and the FOMC decision unusually on a Thursday are two major risk events in an otherwise light US calendar.
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