OIL PRODUCTS: Oil Products End of Day Summary: Diesel Crack Highest Since May 23
Jun-13 18:19
Diesel cracks have risen to their highest level since May 23, accelerating the recovery seen since the start of June. Better than expected US PPI data has added further support during the day.
- US gasoline crack up 0.6$/bbl at 22.85$/bbl
- US ULSD crack up 1.7$/bbl at 25.83$/bbl
- May PPI -0.2% M/M (0.1% expected); core PPI (ex food/energy/trade) 0% (0.3% expected)
- US oil refineries have been processing oil at the fastest seasonal rate since the pandemic but rising fuel inventories have begun to weigh on crack spreads, likely signalling a slowdown to come, Reuters said.
- ARA oil product stocks according to Insights Global. Inventory type, latest level, weekly change (all in thousand metric tons) as follows: Gasoline: 1,129, +239, Naphtha: 486, -31, Gasoil: 2,205, -52, Fuel Oil: 1,570, -15, Jet Fuel: 966, +55
- South Korea’s Hyundai Oilbank has reduced the crude processing volume at one of the CDUs at the 520kbpd refinery in Seosan to about 250kbpd for about a week, according to Reuters sources
- China’s road traffic congestion levels fell by 13% in the week to June 12, down to 121% of Jan. 2021 levels, according to BNEF.
- Crude storage capacity utilisation rates at independent refineries in China’s Shandong province are seen at 44.2% in the week to June 14, up 0.1 percentage points on the week, according to OilChem.
- Singapore onshore fuel oil stocks rose 1.6% higher w/w to 19.16 million barrels (3.02 million metric tons) for the week ended June 12 according to Enterprise data Thursday.
- Singapore middle distillate stocks slipped to a four-month low for the week ended June 12 at 9.028 million barrels – down from 10.845 million barrels last week according to Enterprise data.
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CANADA: 2Y Can-US Yield Differentials Set For Sixth Consecutive Increase
May-14 18:15
- GoC yields sit between 2bp lower (2s) to 0.5bp higher (30s) on the day, on track for the sixth consecutive day of underperformance to Tsys for the front end.
- It sees the 2Y Can-US yield differential at -56bps (+1.8bps on the day) for a fresh high since Apr 9 whilst the 10Y is at -77bps (+3.4bps) for its highest since Apr 4.
- Locally, wholesale sales fared better than expected (ex petroleum etc. -1.1% M/M vs cons -1.3%, and with a mild upward revision) but shouldn’t have been a big mover.
- Tomorrow sees US CPI in focus, with very much secondary factors from Canadian housing starts, manufacturing sales and existing home sales.
- BoC-dated OIS is little changed for near-term meeting with 10-11bp of cuts for June and just shy of 25bp cuts for July. CORRA futures show 60bp of cuts for 2024 contracts.
US: Presidential Race Swings Towards Trump Amid Concerning Polling For Biden
May-14 18:14
The 2024 presidential election race has swung towards former President Donald Trump amid new polling from the New York Times/Siena College which gave Trump a sizable lead over Biden in 5/6 key battleground states.
- In addition, President Biden’s approval rating has slumped again - reversing a moderate recovery after his well-received State of the Union Address in March, according to the 538 tracker. Biden’s approval rating of 38.1% is significantly lower that the 40% benchmark which is considered a useful gauge of an incumbent president’s successful re-election.
- For context, the RealClearPolitics tracker, which notes Biden at a firmer 39.5%, highlights the approval rating of previous presidents at the same time in their respective presidencies: “Approval May 14th (4th Year): Biden 39.5 | Trump 45.6 | Obama 48.3 | Bush 45.6.”
- Axios reports that, “President Biden doesn't believe his bad poll numbers — and neither do many of his closest advisers,” noting that Biden told donors last week: "While the press doesn't write about it, the momentum is clearly in our favor, with the polls moving towards us and away from Trump."
- For the first time since late March betting markets now see Trump as the favourite to win after an extended period where Trump and Biden were running in a dead heat. According to Smarkets, Trump has an implied probability of 50% of winning - the highest implied probabilty Trump has recorded since entering the race.
Figure 1: President Biden Approval Rating
Source: 538
Figure 2: 2024 Presidential Election Winner
Source: Smarkets
EURGBP TECHS: Short-Term Bull Cycle Remains In Play
May-14 18:00
- RES 4: 0.8665 61.8% retracement of the Nov 20 - Feb 14 bear cycle
- RES 3: 0.8652 1.0% 10-dma envelope
- RES 2: 0.8645 High Apr 23 and the bull trigger
- RES 1: 0.8618/21 76.4% of the Apr 23 - 30 sell-off / May 9 high
- PRICE: 0.8598 @ 15:58 BST May 14
- SUP 1: 0.8567/31 50-day EMA / Low Apr 30 and the bear trigger
- SUP 2: 0.8521/8504 Low Apr 17 / Low Mar 8
- SUP 3: 0.8498/93 Low Feb 14 / Low Aug 23 2023 and key support
- SUP 4: 0.8454 76.4% of the Mar 7 - Sep 26 ‘23 bull phase
EURGBP traded higher again last week to undermine the recent bearish theme. This strengthens a developing short-term bullish condition. A continuation higher would open 0.8645, the Apr 23 high and a key short-term resistance. Clearance of this hurdle would highlight an important technical break. Initial support to watch is 0.8567, the 50-day EMA.
