OIL PRODUCTS: Oil Products End of Day Summary: Cracks Fall
Cracks are under pressure today, with underlying product pricing falling and WTI ticking up. Cracks had generally strengthened earlier in the week after significant stock draws, while EIA data suggested US gasoline demand was at its highest since late 2021.
- US gasoline crack down 0.5$/bbl at 21.52$/bbl
- US ULSD crack down 2.3$/bbl at 28.62$/bbl
- The Russian government has not discussed a possible complete gasoline export ban, according to Deputy Prime Minister Alexander Novak.
- June diesel/gasoil loadings from Russia’s Novorossiysk spiked to a multi-year high of 410kb/d and Russia’s total seaborne diesel/gasoil exports rose above the 8-year seasonal level in May, Vortexa said.
- MRPL’s 300kb/d Mangalore refinery expects to ramp up a crude distillation unit by the end of this month to return to full capacity, according to a Bloomberg source.
- Chennai Petroleum plans to shut a 56kb/d crude distillation and lubes unit for maintenance in August-September, according to a Bloomberg source.
- Repsol’s 220k b/d Bilbao oil refinery is restarting some units after planned maintenance, operator Petronor said in an online statement.
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MNI: Fed should take cautious approach - may minutes
- MNI: FED SHOULD TAKE CAUTIOUS APPROACH - MAY MINUTES
- FED: WELL POSITIONED TO WAIT FOR MORE CLARITY ON OUTLOOK
- FED: TARIFFS BOOST RISKS TO INFLATION, EMPLOYMENT
EURGBP TECHS: Fresh Short-Term Cycle Low
- RES 4: 0.8557 High Apr 28
- RES 3: 0.8541 High May 2
- RES 2: 0.8493 High May 9
- RES 1: 0.8447 50-day EMA and a key near-term resistance
- PRICE: 0.8387 @ 16:19 BST May 28
- SUP 1: 0.8373 Low May 27
- SUP 2: 0.8359 1.236 proj of the Apr 11 - 16 - 21 price swing
- SUP 3: 0.8316 Low Mar 28 and a key support
- SUP 4: 0.8277 1.618 proj of the Apr 11 - 16 - 21 price swing
A bear cycle in EURGBP remains in play and a fresh cycle low yesterday reinforces this theme. Resistance to watch is at the 50-day EMA at 0.8447. A clear break of this average is required to highlight a stronger reversal and shift attention to resistance at 0.8541, the May 2 high. On the downside, a resumption of the downtrend would pave the way for a move towards 0.8359, a Fibonacci projection.
BONDS: EGBs-GILTS CASH CLOSE: Yields Continue To Back Up
European yields backed up Wednesday, continuing their rise from Tuesday's lows, with Gilts underperforming Bunds.
- A soft long-end Japanese bond auction overnight set a weaker tone for global core FI early.
- In data, ECB 1-year ahead inflation expectations surprisingly rose but longer-term expectations were steady, muting the impact.
- On the day, the UK curve leaned bear steeper to the 10Y segment, with 30Y outperforming. The German curve more clearly bear steepened.
- BTPs led broader gains in much of the session, with 10Y yields falling to the lowest levels since February. 10-year EGB periphery/semi-core spreads tightened 0.3-1.0bps vs Bunds on the day.
- Thursday's calendar includes an appearance by BOE's Bailey; in data we get Spanish retail sales, and Italian confidence indicators and industrial sales.
- Attention for the week is on Friday's flash May inflation readings from Germany, Italy and Spain.
Closing Yields / 10-Yr EGB Spreads To Germany:
- Germany: The 2-Yr yield is up 0.6bps at 1.797%, 5-Yr is up 1.4bps at 2.107%, 10-Yr is up 2.2bps at 2.554%, and 30-Yr is up 2.9bps at 3.031%.
- UK: The 2-Yr yield is up 5.5bps at 4.075%, 5-Yr is up 5.4bps at 4.206%, 10-Yr is up 6.1bps at 4.727%, and 30-Yr is up 4.5bps at 5.48%.
- Italian BTP spread down 0.4bps at 98.1bps / French OAT down 0.5bps at 67.3bps
