OIL PRODUCTS: Oil Products End of Day Summary: Cracks Rise
Jul-17 18:29
Cracks are headed for US close stronger today, with diesel cracks maintaining continued support from low stocks. A tight summer diesel market persists in Europe and the US, with Asian diesel cargoes potentially heading to Europe.
- US gasoline crack up 0.2$/bbl at 23.62$/bbl
- US ULSD crack up 2.1$/bbl at 35.94$/bbl
- ARA stockpiles according to Insights Global. Inventory type, latest level, weekly change (all in thousand metric tons): Gasoline: 1,204, +63, Naphtha: 602, -58, : 1,760, -86, Oil: 1,024, +5. Jet Fuel: 807, +55
- The outlook for East of Suez gasoline cracks is neutral, according to Kpler. Meanwhile, Kpler are neutral on the outlook for global HSFO and VLSFO cracks.
- West of Suez gasoil cracks have found support amid tightness in stocks within US PADDs 1 and 3, low Rhine water levels, and stronger Brazilian demand, Kpler said.
- At least two long-range 2 tankers have been booked to load diesel in July from ports in China, South Korea and Singapore for transport to western Europe according to sources cited by Bloomberg.
- Nigeria’s Dangote refinery restarted the RFCC on July 12, after a hiatus lasting 10 days, according to an IIR statement cited by Bloomberg on Wednesday.
- Phillips 66 partially shut its 258,500 b/d Bayway refinery following rainstorms July 15, Reuters said.
- India’s ONGC is considering setting up a 10-12m mtpa refinery in Jamnagar, the same city where Reliance operates the world’s largest refinery, Bloomberg reports
- Singapore’s total oil product stockpiles fell by 1.8m bbl w/w to 44.7m bbl as of July 16, the lowest level in two months, according to government data cited by Bloomberg.
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US STOCKS: Late Equities Roundup: Risk-Off on Middle East Tension, Will US Join?
Jun-17 18:26
- Still off early Monday lows, stocks are retreating late Tuesday as Middle East tensions heat up. Following a series of social media posts around midday, wires said Pres Trump is considering joining Israel on striking Iran. Markets currently await a state Department press briefing.
- Currently, the DJIA trades down 320.42 points (-0.75%) at 42195.11, S&P E-Minis down 51.25 points (-0.84%) at 6038.5, Nasdaq down 185.9 points (-0.9%) at 19515.53.
- A mix of Health Care, Materials and Consumer Discretionary sectors underperformed in the first half, but it was a handful of Tech stocks led laggers: Enphase Energy -22.82%, First Solar -17.95% and AES -9.12% as the Senate looks to end wind & solar tax credits.
- Pharmaceuticals traded weaker as the WH considers cracking down on drug company advertising: Charles River Laboratories -4.56%, Bio-Techne -3.78%, IQVIA Holdings -3.15%, Thermo Fisher Scientific -2.93% and AbbVie -2.73%.
- The Energy sector outperformed as said geopol risk buoyed crude prices (WTI +2.804 at 74.57) in turn supported oil and gas stocks: Valero Energy +2.32%, APA Corp +2.17%, Diamondback Energy +2.15% and Chevron +1.92%.
SWAPS: Spreads Widen As Fed Set To Hold Open Meeting On SLR
Jun-17 18:07
The Federal Reserve has provided notice that it will hold an Open Board Meeting at 2pm ET on Wednesday Jun 25, with the subject: "Proposed revisions to the Board’s supplementary leverage ratio standards".
- While there were no more details provided, the announcement appears to have rekindled speculation that the regulatory authorities will soon align on an easing of SLR standards, which is seen to be supportive of demand for Treasuries vs swaps.
- The 10Y SOFR swap spread widened in Treasuries' favor by 0.9bp to -52.6bp. The spread remains tighter than the -50bp level that has prevailed since Treasury market turmoil in April.
- This is unlikely to be the end of the process: Gov Bowman who heads Fed supervision said earlier this month that the Fed will host a conference in July addressing several aspects of large bank regulation including SLR, though in a nod to broader reforms, she says there will also be potential changes discussed at the event including GSIB surcharges, Basel III capital requirements, and stress testing.
US: State Department Press Conference Underway Shortly
Jun-17 18:01
US State Department Spokesperson Tammy Bruce is shortly scheduled to brief reporters from the Department of State. LIVESTREAM
- If the presser goes forward, there will be considerable market interest on any details that could flesh out the administration's position on Iran, including the prospect of diplomacy or outreach to Tehran from Secretary of State Marco Rubio.
- US President Donald Trump told reporters aboard Air Force One yesterday, without conviction, that he “may” dispatch either Vice President JD Vance or Middle East envoy Steve Witkoff for talks with Iranian officials.
