OIL PRODUCTS: Oil Products Summary at European Close: Cracks Slip
May-09 18:26
US cracks are losing ground today despite rising flat prices for products. Rises for gasoline and diesel prices are being outpaced by improving sentiment in the crude market.
- US gasoline crack down 0.3$/bbl at 27.55$/bbl
- US ULSD crack down 0.4$/bbl at 25.76$/bbl
- Analyst John Kemp writes that “US refinery margins have reverted to the long-term average, after slumping in the second half of last year, following a much larger-than-normal depletion of fuel inventories since the beginning of 2025.
- Lloydminster heavy oil upgrader (Canada): Achieved record quarterly throughput with a 104% utilization rate, driven by improvements from a major 2024 turnaround. Demonstrated strong operational reliability despite narrow light-heavy differentials.
- China’s CDU capacity utilisation rates in China fell in the week to May 9, according to OilChem.
- Two independent Chinese refiners, Fuhai Group Co. and Shaanxi Yanchang Petroleum Group, each purchased around 1mbbl of Murban crude for June delivery, according to Bloomberg.
- Iraq's state-owned marketer SOMO has offered a term contract to supply HSFO between Jul-Dec 2025 Reuters sources report.
- CITGO refinery highlights: Total throughput for the first quarter was 833,000 bpd, of which crude runs were 768,000 bpd and overall average crude utilization rate was 95%.
- Global implied passenger jet fuel demand in the week to May 12 is seen at 6.91m b/d, up 0.7% the week and up around 5.1% year-on-year, BNEF said.
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US TSY FUTURES: BLOCKs: Additional Crosses Pre/Post Minutes
Apr-09 18:19
- Both appear to be buys:
- 7,000 TUM5 103-16.5, through 103-15.38 post time offer at 1400:13ET, trades 103-13.5 last (-16.5)
- 5,000 FVM5 107-25.75, post time offer at 1356:20ET, trades 107-16.25 last (-1-00.75)
TARIFFS: Current State Of EU, Mexico, Canada Tariffs Left Unclear
Apr-09 18:14
Is the EU part of the 10% / 90 day pause club? There is a lot of ambiguity in the announcement and Tsy Sec Bessent failed to clarify this (and also added to the confusion with MX and CA, see below). Having announced retaliation vs the US today, the EU could be considered excluded - however unlike China's retaliatory moves which are in place, the EU's retaliatory tariffs only go into effect April 15.
- And it seems that the main thrust of the announcement is to isolate China.
- So at the moment we (and the markets) are operating under the assumption that the EU is in the 10% / 90 day negotiation window though we await an official announcement.
- Re Mexico and Canada, per BBG's Canada reporter on X.com, @btaplatt: "It's going to take a bit to get clarity on whether any of this affects Canada. In theory it shouldn't, as Canada wasn't included in the reciprocal tariff order. Scott Bessent said yes when asked if Canada/Mexico are at 10% but, uh...we'll have to see whether he misspoke."
US TSYS: Post-March FOMC Minutes React
Apr-09 18:11
- Treasury futures remain near session lows, little react to release of FOMC minutes that note risks to increased inflation and elevated policy uncertainty.
- Focus remains squarely on Pres Trump tweet upping China tariff to 125% while granting 90 day pause for 75 other countries while lowering to reciprocal tariff level to 10%.
- Most notable for Tsys is the swing in curves - from new 3 year highs overnight (2s10s tapped 73.847) to -14.830 flatter at 41.283 at the moment.
- Projected rate hike pricing retreats: current levels vs. this morning (*) as follows: May'25 at -5.3bp (-11.8bp), Jun'25 at -19.1bp (-34.8bp), Jul'25 at -34.9bp (-58.4bp), Sep'25 -50.2bp (-76.2bp). Year end projection of 75bp total rate cut vs. full point this morning.
