OIL PRODUCTS: Oil Products End of Day Summary: Cracks Mixed
Cracks are mixed today ahead of EIA data tomorrow, with gasoline pricing higher, while diesel product pricing lagging.
- US ULSD crack down 0.4$/bbl at 33.64$/bbl
- ULSD AUG 25 up 1.6% at 2.46$/gal
- US gasoline crack up 0.6$/bbl at 22.19$/bbl
- RBOB AUG 25 up 3.9% at 2.22$/gal
- US 321 crack up 0.3$/bbl at 26.01$/bbl
- EIA surveys: Gasoline (bbl): -0.97m (Bbg),-0.9m (WSJ), Distillates (bbg):0 (Bbg), -0.1m (WSJ). Ref runs: -0.28% (Bbg), -0.2% (WSJ).
- Reuters reports a leading US refining trade group has criticized the Trump administration's biofuel policies in a letter to top Republican lawmakers, representing the oil industry's biggest rift with the president since his return to the White House in January.
- The prompt ICE Gasoil time spread stands at its lowest since July 15 amid relative strength in the September contract, given expectations of persisting diesel market tightness.
- Saudi Arabia’s diesel exports for July set a record high, with Aramco offering its first cargo of diesel in the Northwest European Platts MOC assessment process on July 28, Platts reports.
- Nayara Energy is reducing run rates at its Vadinar refinery, according to Bloomberg citing sources.
- Russia’s offline primary oil refining capacity has been revised up by 6.3% in July from a previous plan to 4.1m mt, according to Reuters.
- Russia’s weekly refinery runs rose to over 5.4m b/d between July 17-23 as several major facilities returned from seasonal maintenance, according to Bloomberg.
- Pemex’s seven refineries in June processed the crudest since April 2016 driven by a ramp up at the Dos Bocas refinery, according to company data cited by Bloomberg.
- China’s exports of key refined fuels are on track to jump to the highest in 16 months, as refiners take advantage of rising profit margins, according to Clyde Russell at Reuters.
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US FISCAL: Available "Extraordinary" Measures To Ward Off X-Date Pick Up
Treasury reported Friday that as of Jun 25 it had $130B in remaining "extraordinary" measures (of a total $378B available) to ward off an "x-date" of running out of resources before defaulting. That's the highest in 2 weeks.
- Combined with $334B cash as of Jun 25 (after a bit of a buildup after the mid-June tax deadline), that's a total of roughly $465B in total resources available.
- We noted earlier this week that Treasury told Congress that it was required to extend its debt issuance suspension period from Jun 27 to Jul 24, in effect prolonging the use of extraordinary measures while we await a resolution to the debt limit impasse, probably through the fiscal legislation currently going through Congress.
- Realistically, fiscal dynamics so far this year point to potential for Treasury to get into September without running out of cash + extraordinary measures. That seems to be the broad market expectation.
US DATA: Cleveland, Dallas Fed PCE Medians Show Progress But Still Above-Target
The Cleveland and Dallas Fed's median PCE metrics showed a notable drop in May. All indices suggest PCE inflation running above 2%, and higher than the actual core and headline PCE measures, but pressures appear to have cooled from a pickup in the early months of the year.
- The Cleveland Fed's median PCE measure came in at 0.22% M/M, a 10-month low after April's 15-month high 0.31%. This left median PCE at 3.01% on a Y/Y basis, down from 3.06% prior for a the joint-lowest (with Feb) since September 2021.
- The Dallas Fed's annualized median rate fell to 2.01%, from 2.65% prior for a 10-month low. The 6-month annualized rate edged lower to 2.74% (2.76% prior), a 4-month low, with the Y/Y rate ticking down to 2.55% from 2.56%, echoing the Cleveland Fed for the lowest reading since September 2021.
USDCAD TECHS: Pivot Resistance Remains Intact
- RES 4: 1.4111 High Apr 4
- RES 3: 1.4016 High May 12 and 13 and a key resistance
- RES 2: 1.3920 High May 21
- RES 1: 1.2710/3803 20- and 50-day EMA values
- PRICE: 1.3658 @ 16:23 BST Jun 27
- SUP 1: 1.3618 Low Jun 26
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
USDCAD has pulled back from its recent highs. The primary downtrend remains intact and short-term gains appear to have been corrective. Key support and the bear trigger has been defined at 1.3540, the Jun 16 low. Clearance of this price point would resume the downtrend. Any reversal higher would instead signal scope for a stronger retracement. Pivot resistance to monitor is at the 50-day EMA, at 1.3803.
