OIL PRODUCTS: Oil Products End of Day Summary: Cracks Rise
US cracks are higher today amid gains in refined product prices and a slight decline in underlying crude. Refinery maintenance and some unplanned upsets is likely supportive for refined products.
- US ULSD crack up 1$/bbl at 26.45$/bbl
- ULSD MAY 25 up 1% at 2.09$/gal
- US gasoline crack up 0.6$/bbl at 23.47$/bbl
- RBOB MAY 25 up 0.8% at 2.01$/gal
- US 321 crack up 0.8$/bbl at 24.46$/bbl
- National Average Price of Gasoline Continues to Drift Lower, Falling 5.3c/gal Over the Last Week to $3.166/gal: GasBuddy
- US oil refiners are expected to have about 1.46 mb/d of capacity offline in the week ending April 18, increasing available refining capacity by 286k b/d, research company IIR Energy reports.
- Motiva 626k b/d Port Arthur FCC Up After Upset, Fuel Testing by Wednesday: Bloomberg
- The 177k b/d Citgo Lemont refinery reported a fuel line leak, according to a filing submitted to the Illinois Emergency Management Agency.
- Motiva’s 626kb/d Port Arthur, Texas refinery had a process upset on the evening of April 12 involving the fluid catalytic cracker, according to a Texas Commission on Environmental Quality filing.
- Marathon’s Wilmington refinery had an unplanned flare event, according to a Bloomberg headline.
- Gasoline and diesel demand in China may fall more than previously expected due to heightened US-China trade risks, according to GL Consulting cited by Bloomberg.
- CDU capacity utilisation rates at China’s state-owned refineries are expected to fall in the week to April 17, according to OilChem, with Tianjin Petrochem and Jinxi Petrochem starting new routine maintenance.
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
