OIL PRODUCTS: Oil Summary at European Close: Diesel Cracks Supported
Diesel cracks are supported by a larger-than-expected inventory drawdown last week after cold weather boosted demand.
- US gasoline crack up 0.4$/bbl at 13.79$/bbl
- US ULSD crack up 1$/bbl at 27.27$/bbl
- EIA Weekly US Petroleum Summary - w/w change week ending Jan 24: stocks +2,957 vs Exp +349, Implied mogas demand +216, Distillate stocks -4,994 vs Exp -2,154, Implied dist demand +398, Ref runs -333
- Gasoline stocks increased to the highest since Feb 2024 amid higher imports, lower exports to offset an increase in implied demand. The four-week average implied gasoline demand edged higher to hold just above the previous five year average.
- Distillates stocks fell more than expected due to higher implied demand as both imports and exports fell on the week.
- Jizan refinery maintenance to hit road fuel and residual fuel supply across multiple regions in Q1, according to Vortexa.
- Nigeria’s gasoline imports are on course to hit eight-year low as the Dangote refinery ramp-up pushes out foreign suppliers, Bloomberg reports.
- Russia’s largest oil companies may receive government permission to continue gasoline exports until the end of February, allowing them to maintain higher runs Kommersant reports.
- Fire at Sibur-Kstovo refinery in Nizhny Novogorod region has been contained, Interfax reports.
- Full year cargo demand measured in cargo tonne-kilometres (CTK)increased 11.3% on the year, according to IATA
- Rhine water levels at Maxau, a bottleneck point on Europe’s key industrial waterway, exceeded 6.5m, the highest since Jan. 11, Bloomberg said.
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US DATA: Stronger Dallas Fed Manufacturing Only Partly Offsets Wider Weakness
December's Dallas Fed Manufacturing Survey beat expectations with a headline reading of positive 3.4 vs -3.0 expected and -2.7 prior. That's the first positive reading in 32 months and the highest in 33, highlighted by a much stronger new orders reading (up 11 points to -0.9, pointing to unchanged demand from the prior month but still the best reading in 31 months).
- Other readings were mostly stronger vs November, including production, capacity utilization, shipments, expectations, though the employment subindices were a little softer.
- Notably though, there were much lower inflationary pressures evident in the survey, with raw materials prices falling 18 points to a 17-month low 10.5, with finished goods falling 12 points to -3.4, the first negative reading this year.
- Dallas is the 5th regional Fed to publish its December manufacturing report, and overall they were very mixed: Empire fell to 0.2 from 31.2 and Philly to -16.4 from -5.5, with Kansas City to -4 from -2, more than offsetting the improvements in Richmond (-10 from -14) and Dallas.
- That's not to mention the December MNI Chicago PMI which fell to 36.9 vs 40.2 prior, and the preliminary S&P Global PMI dipping to 48.3 from 49.7.
- As such despite an apparent improvement in some regional survey optimism immediately following the November elections (and again, this was quite mixed - the range of survey scores was the broadest since April 2020), the overall theme of the manufacturing sector remaining steady at a weak level generally remains intact.
US 10YR FUTURE TECHS: (H5) Trend Needle Points South
- RES 4: 112-02 Low Oct 14
- RES 3: 111-20+ High 6 and the bull trigger
- RES 2: 110-28 50-day EMA
- RES 1: 110-03+ 20-day EMA
- PRICE: 108-29 @ 16:16 GMT Dec 30
- SUP 1: 108-12 Low Dec 30
- SUP 2: 108-00 1.500 proj of the Oct 1 - 14 - 16 price swing
- SUP 3: 107-27+ 1.0% 10-dma envelope
- SUP 4: 107-19+ 1.618 proj of the Oct 1 - 14 - 16 price swing
The trend condition in Treasury futures remains bearish despite the intraday rally into the Monday close. These short-term gains are considered corrective below the 110-03+ 20-day EMA. Last week’s sell-off reinforces the current bear cycle. The contract has traded through key short-term support and the bear trigger at 109-02+, the Nov 15 low. The breach confirms a resumption of the downtrend and opens 108+12+, a Fibonacci projection.
FED: US TSY 26W AUCTION: NON-COMP BIDS $1.723 BLN FROM $72.000 BLN TOTAL
- US TSY 26W AUCTION: NON-COMP BIDS $1.723 BLN FROM $72.000 BLN TOTAL
