OIL: Oil Products Summary at American Close: Cracks Rise
Oct-17 18:38
Oil Products Summary at American Close: Cracks Rise
Cracks are higher amid signs of disruption at BP’s Whiting refinery. Diesel cracks are nevertheless set for a net weekly decline amid economic fears stemming from heightened US-China trade tensions. Gasoline cracks have been supported this week by signs of limited crude purchasing by the Dangote refinery.
- US ULSD crack up 1$/bbl at 34.09$/bbl
- US gasoline crack up 0.9$/bbl at 19.55$/bbl
- US 321 crack up 0.9$/bbl at 24.40$/bbl
- EU Gasoil-Brent up 0.7$/bbl at 23.03$/bbl
- EU Gasoline-Brent up 0.3$/bbl at 14.32$/bbl
- Patrick DeHaan notes on X that the Whiting facility experienced a fire last night that was extinguished and was actively flaring while alarms were heard in the area.
- A fire broke out at SK Energy's 669kb/d Ulsan refinery in South Korea during partial maintenance, according to Argus sources.
- Russia’s Deputy Prime Minister Alexander Novak said that so far there is no need to import fuel to Russia, according to Tass cited by Bloomberg.
- The European Commission published on Oct. 16 updated guidelines on the documentation and due diligence required for complying with the import ban on refined products processed from Russian oil.
- Drones reportedly attacked a fuel oil depot in Crimea on the night of Oct. 16-17, according to various Ukrainian media outlets.
- China’s new energy vehicle (NEV) sales rose in September, supported by steady overall auto demand, effective trade-in subsidies, and the upcoming end of some provincial incentives, OilChem said.
- CDU capacity utilisation rates at China’s state-owned refineries fell by 1.03%pts in the week to Oct. 17 to average at 81.23%, OilChem said.
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FED: Chair Powell Begins September FOMC Press Conference
Sep-17 18:38
- Powell begins with the usual description of current economic conditions, and walks through the latest economic projections.
- "Recent indicators suggest that growth of economic activity has moderated. "
- "the recent pace of job creation appears to be running below the break even rate needed to hold the unemployment rate constant...Overall, the market slowing in both the supply of and demand for workers is unusual in this less dynamic and somewhat softer labor market."
- "Inflation has eased significantly from its Highs in mid 2022 but remains somewhat elevated relative to our 2% longer run goal estimates ... [PCE} readings are higher than earlier in the year, as inflation for goods has picked up. In contrast, disinflation appears to be continuing for services."
- Powell repeats language relating to the uncertainty of the inflation impact of tariffs:
- "Higher tariffs have begun to push up prices in some categories of goods, but their overall effects on economic activity and inflation remain to be seen. A reasonable base case is that the effects on inflation will be relatively short lived a one time shift in the price level. But it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed. Our obligation is to ensure that a one time increase in the price level does not become an ongoing inflation problem in the near term. Risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation when our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate with downside risks to employment having increased the balance of risks has shifted."
- He says that "We judged appropriate at this meeting to take another step toward more new a more neutral policy stance. With today's decision, we remain well positioned to respond in a timely way to potential economic developments, we will continue to determine the appropriate stance of monetary policy based on the incoming data, the evolving outlook and the balance of risks."
- And "policy is not on a preset course".
US TSYS: Fed Chair Powell Presser React
Sep-17 18:36
- Treasury futures have reversed much of the initial post-rate cut reaction, trade mixed as Chairman Powell continues with his presser. Tsy Dec'25 10Y futures currently trades -2.5 at 113-15 (113-08 low, 113-25.5 high).
- Curves mixed: 2s10s +0.014 at 52.272, 5s30s -1.788 at 104.424
- Stocks mixed with the DJIA outperforming weaker SPX & Nasdaq
- US$ bounces off lows: Bbg index BBDXY -1.92 at 1186.98 vs. 1183.70 low
FOREX: Dollar Extends Decline Following Fed Cut & Statement Adjustments
Sep-17 18:26
- Statement surprises including downside risks to employment rising and the shift in the balance of risks suitably weigh on the US dollar, bolstering the underlying trend of greenback weakness this week. Price action sees the USD index break the aforementioned cycle lows, which places the DXY at the lowest point since February 2022.
- USDJPY sharply through those 146.21 lows and the bear trigger, to reach a low print of 145.49, significantly narrowing the gap to the next chart point of 145.40 (50% retracement of the Apr - Aug upleg). Should downside momentum continue, support is scant until 142.68, the July 01 low.
- EURUSD has risen to a high of 1.1919 and the immediate focus is on 1.1923, the 2.00 proj of the Feb 28 - Mar 18 - 247 price swing, while GBPUSD briefly surges above 1.37 and outperforms on the session.
- Cycle highs for cable reside at 1.3789, the July 1 and key resistance which could provide a significant level given the upcoming FOMC press conference and tomorrow’s Bank of England MPC meeting.
- AUD and NZD relatively underperform on the session following the sharp two-way swings for major equity benchmarks. AUDUSD did rise to a fresh 11-month high of 0.6707.
