OIL PRODUCTS: Oil Products Summary At European Close: Cracks Rise
US diesel and gasoline cracks are higher today ahead of weekly inventory data and with gasoline entering the summer driving season.
- US ULSD crack up 0.7$/bbl at 23.99$/bbl
- US gasoline crack down 0.2$/bbl at 23.36$/bbl
- US 321 crack up 0.1$/bbl at 23.53$/bbl
- The API US oil inventory data is due at 16:30ET ahead of the EIA Weekly Petroleum Status Report tomorrow. A Reuters survey indicates a crude stock draw of 0.9mbbl in the week ended May 30. Gasoline stocks are seen to build 1.5mbbl and distillates stocks to build 2.5mbbl. Refinery runs are expected up 0.9 percentage points.
- Reports suggest that both crude distillation units are currently offline at the BP Rotterdam refinery, with one outage potentially unplanned.
- The Rhône Energies 140kb/d Fos oil refinery had a temporary malfunction with a refinery unit on the afternoon of June 3, according to a community alert.
- CDU capacity utilisation rates at China’s state-owned refineries are expected to tick up in the week to June 5, according to OilChem, as Jinxi Petrochem and Beihai Petrochem ramp up production post scheduled maintenance.
- Russian oil product exports from the Black Sea port of Tuapse are set to rise to 846k tons in June, up 7.9% on a daily basis from the 810k tons scheduled for May, Reuters reports citing traders.
- Russia’s ultra low-sulphur diesel exports from the Baltic port of Primorsk are set to fall to 1.3m mt in June, according to Reuters sources.
- Russia’s crude-processing rates averaged 5.27m b/d for May 1-28, down by around 120k b/d compared with most of April amid seasonal maintenance, Bloomberg reports citing source.
- Iran’s refining capacity has risen by approximately 160k b/d since August last year to 2.4m b/d, local news outlet Shana reports.
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Historical bullets
USDCAD TECHS: Hits Bear Trigger, New Cycle Low
- RES 4: 1.4415 High Apr 1
- RES 3: 1.4296 High Apr 7
- RES 2: 1.4087 50-day EMA
- RES 1: 1.3906/3935 High Apr 17 / 20-day EMA
- PRICE: 1.3793 @ 17:00 BST May 2
- SUP 1: 1.3760 Low Apr 21 and the bear trigger
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
The trend set-up in USDCAD deteriorated further Friday, with prices slipping through the bear trigger to narrow the gap with next support. The fresh cycle low reinforces the bear cycle and signals scope for a continuation near-term. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Moving average studies are in a bear mode position, highlighting a dominant downtrend. First resistance to watch is 1.3943, the 20-day EMA.
AUDUSD TECHS: Consolidation Phase
- RES 4: 0.6550 61.8% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6528 High Nov 29 ‘24
- RES 2: 0.6471 High Dec 9 ‘24
- RES 1: 0.6470 High May 2
- PRICE: 0.6445 @ 16:59 BST May 2
- SUP 1: 0.6344/6316 Low Apr 24 / 50-day EMA
- SUP 2: 0.6181 Low Apr 11
- SUP 3: 0.6116 Low Apr 10
- SUP 4: 0.5915 Low Apr 9 and key support
AUDUSD remains inside a consolidation phase, having traded either side of the 0.6400 level for 10 consecutive sessions. The underlying trend remains bullish and the pair is trading close to recent highs. Price has recently breached a key resistance at 0.6409, the Dec 9 ‘24 high. This breach reinforces bullish conditions and signals scope for a continuation higher near-term. Sights are on 0.6471 next, the Dec 9 2024 high. Initial key support to monitor is 0.6316, the 50-day EMA. A clear break of this EMA would be a concern for bulls.
US TSYS: Rates Retreat, Sentiment Improved Though Trade Risk Remains
- Treasuries look to finish near late Friday session lows after trading firmer on the open, higher than expected Nonfarm payrolls at 177k (sa, cons 138k) of which private contributed 167k (sa, cons 125k) triggered the early reversal.
- However, two-month revisions of -58k offset the 39k beat for nonfarm payrolls, with a similar story for private (a 42k surprise vs -48k two-month revision).
- Stocks are back near four week highs - pre-"Liberation Day" levels as hopes of some trade deal being made improved sentiment.
- The Wall Street Journal reports that "Beijing is considering ways to address the Trump administration’s gripes over China’s role in the fentanyl trade... potentially offering an off-ramp from hostilities to allow for trade talks to start." The Journal notes that "discussions remain fluid" and China "would like to see some softening of stance from President Trump".
- Currently, the Jun'25 10Y contract trades -20 at 111-07.5 vs 111-02 low -- initial technical support (50-dma) followed by 110-16.5/109-08 (Low Apr 22 / 11 and the bear trigger). Curves bear flattened, 2s10s -3.480 at 48.002, 5s30s -4.911 at 86.807.
