OIL PRODUCTS: Oil Products End of Day Summary: Cracks Slide
US cracks are losing further ground today despite surprise large stock draws in EIA data. Both gasoline and diesel cracks are on track for declines week on week.
- US gasoline crack down 0.7$/bbl at 23.83$/bbl
- US ULSD crack down 1$/bbl at 23.4$/bbl
- ARA oil product stockpiles according to Insights Global: Inventory type, latest level, weekly change (all in thousand metric tons) as follows: Gasoline: 1,077, -30, Naphtha: 556, +31, Gasoil: 1,989, -195, Fuel Oil: 1,149, +47, Fuel: 848, +61
- Bloomberg reports the driving season in the US officially began Monday with the Memorial Day weekend and the initial data show more Americans hit the road compared with last year, a good sign for gasoline demand and refiners.
- Dangote’s 650,000 bpd refinery in Nigeria is expected to run its gasoline making unit at reduced rates in October according to IIR Energy.
- Russia’s refined product exports rebounded in May, led primarily by gains in diesel, BNEF said.
- India’s diesel exports to Southeast Asia for May are set to hit the highest in at least four years, as higher freight costs deterred shipments to Europe, Reuters reports.
- Petroecuador on Thursday declared a 60-day emergency at the Esmeraldas refinery, its second emergency in one month, following a fire at a fuel tank on Monday, Reuters reports.
- Total air passenger demand measured in revenue passenger kilometres (RPKs) rose 8.0% on the year in April, according to IATA.
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TARIFFS: US Contacting China Re Tariffs Via Multiple Channels, Per Report
MNI (NEW YORK) - Making the rounds now on Bloomberg is the headline "US Has Reached Out to China for Tariff Talks, CCTV Says". The report underlying the headline was out closer to an hour ago based on the timestamp in the Weibo account post in question which is affiliated with China official media. Unclear whether this has helped the risk-on bid in equities over the last 20 minutes.
- Per the social media post (Google-translated - link here): "the US has taken the initiative to contact China through multiple channels, hoping to negotiate with China on the issue of tariffs", with the author citing sources.
US: More Than 50% Of Americans Believe US Is On Wrong Track'
55.6% of Americans report that the US is on the "wrong track", a reversal of the positive response to the first two weeks of the Trump administration, according to data fro Decision Desk HQ.
- The trackers shows that the turnaround in sentiment appears to correlate with Trump's initial tariff announcements in the first week on February and then accelerated following the announcement of Trump's 'Liberation Day' tariffs on April 2.
- The return of sentiment to levels during the Biden administration is another warning sign for the Trump administration that US voters are sceptical of Trump's handling of the economy. The flagging public support of administration policy is likely to weigh heavily on Republican lawmakers ahead of crucial votes in Congress on Trump's expansive tax and spending agenda.
Figure 1: Right Track/Wrong Track
Source: DDHQ
EURGBP TECHS: Bear Cycle Extends
- RES 4: 0.8781 2.236 proj of the Mar 3 - 11 - 28 price swing
- RES 3: 0.8768 High Nov 20 ‘23
- RES 2: 0.8624/0.8738 High Apr 21/ High Apr 11 and the bull trigger
- RES 1: 0.8557 High Apr 28
- PRICE: 0.8500 @ 16:28 BST Apr 30
- SUP 1: 0.8482 Low April 30
- SUP 2: 0.8477/60 61.8% of the Mar 28 - Apr 11 rally / 50-day EMA
- SUP 3: 0.8415 76.4% retracement of the Mar 28 - Apr 11 rally
- SUP 4: 0.8316 Low Mar 28 and a key support
EURGBP was sold off a mid-session rally, keeping the technical picture intact and highlighting a continuation of the current bear cycle. Sights are on 0.8477, a Fibonacci retracement point where a break would strengthen the bearish theme. Support at the 50-day EMA, is at 0.8460. It is still possible that the move down that started Apr 11, is a correction. A reversal and a resumption of gains would open 0.8738, the Apr 11 high and bull trigger.
