OIL: PFB’s Refining Margins Shrink in Q3
PFB’s gross refining margins per barrel of throughput stood at $6.79/b in Q3, down 69.4% on the year, the company said in its earnings report, cited by Reuters.
- The company added that its Q3 crude oil and feedstocks throughput stood at 935k b/d, compared to 939.7k b/d in Q3 2023.
- "PBF's financial results for the quarter reflect the broader macro headwinds brought about by weaker-than-expected global demand and higher-than-anticipated refinery utilization," PBF Energy's CEO Matt Lucey said in a statement.
- Refiners have seen a drop in profitability due to soft consumer and industrial demand, particularly from China.
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US TSY FUTURES: BLOCK: Dec'24 10Y vs. 10Y Ultra-Bond
- Block posted at 0805:35ET: 10s appear to be sold vs. 10Y ultra
- 10,452 TYZ4 114-20.5 post time offer, DV01 $680,000
- 7,747 UXYZ4 118-28, through 118-27 post time offer, DV01 $709,000
US TSYS: Early SOFR/Treasury Option Roundup
Option desks still reporting mixed flow overnight, SOFR options a little more paired with rise in call trades as underlying futures recover some ground after late Monday's post-Powell "recalibration". SOFR White pack (SFRZ4-SFRU5) currently +0.010-0.030, while projected rate cuts into early 2025 gain slightly vs. late Monday levels (*): Nov'24 cumulative -35.4bp (-34.1bp), Dec'24 -68.9bp (-70.8bp), Jan'25 -102.1bp (-100.6bp). Salient trade includes:
- SOFR Options:
- 4,200 SFRF5 96.12/96.31/96.37/96.56 put condors ref 96.50
- Block, 3,500 SFRX4 96.00/96.12 call spds vs. 95.43/95.75 put spds, 2.25 net/call spd over
- 2,000 SFRV4 95.68/95.81/95.93 2x3x1 put flys ref 95.975
- Block, 3,750 SFRX4/SFRZ4 96.12/96.37 call spd spd, 0.75 net/Dec over
- 2,000 2QX4 96.37/96.62/97.50/97.75 put condors
- 5,000 SFRX4 95.75/95.87/96.00 put flys ref 95.98
- 3,200 0QV4 97.12/97.31 call spds ref 97.03
- Block, 2,500 SFRZ4 95.93/96.25 5x6 call spreads, 41.5 vs. 2,850 SFRZ4 at 95.97
- 2,000 SFRZ5 96.87 puts, ref 97.02
- Treasury Options:
- over 3,700 FVX4 109.25 puts, 12 last
- over 3,000 FVX4 109.50 puts, 15 last
- over 10,700 wk 2 10Y 115.25 calls, 21 ref 114-21.5
- over 9,600 Wednesday wkly 115 calls, 5 ref 114-20.5
BONDS: Gilt/Bunds Above 190bp, Eyes Sep '23 Wides
Recent Gilt/Bund widening extends, with the 10-Year spread breaching 190bp at typing.
- The spread has not closed above 190bp since September ’23.
- The next upside level of note comes in at the September 5 ’23 closing high (191.36bp).
- This morning’s combination of dovish ECB repricing and increased odds of imminent French fiscal adjustments has driven the latest leg of widening.
- Meanwhile, the stickier short-term inflation outlook and relatively resolute economic performance in the UK factors in on the gilt side.
- The BoE’s reluctance to firmly commit to follow up rate cuts and the risk of increased UK issuance are also noted.
Fig. 1: 10-Year Gilt/Bund Spread (bp)
Source: MNI - Market News/Bloomber
