AMERICAS OIL: WTI crude came under pressure
Jul-18 18:34
July 18 - Americas End-of-Day Oil Summary: WTI crude came under pressure after EU revealed its import ban on Russian refined products obtained in third countries will have a transitional period of six months. This also bolstered ULSD futures, which had also been higher after the EIA reported higher implied demand year-on-year.
- Japan’s PM Ishiba said Treasury Secretary Bessent had told him that he was sure a good deal between the US and Japan was possible.
- US President Trump was reportedly eyeing tariff rates of 10% -15% on more than 150 countries.
- The EU has adopted its latest Russia sanctions package, including a dynamic oil price cap, and sanctions on India’s Vadinar refinery, alongside sanctions on tankers involved in Russia’s energy trade.
- The EU’s latest restrictions on Russian crude are unlikely to alter the global supply picture, Bloomberg said.
- In the first two weeks of July, global oil demand has averaged 105.2 million barrels per day (bpd), up by 600,000 bpd from a year earlier and largely in line with forecast, JPMorgan analysts said.
- South Korean refiners, the second-biggest buyers of US crude this year, have so far purchased ~12m-14m bbls of US oil for arrival in October, according to Bloomberg sources.
- Asian refiners are buying more Kazakhstan CPC blend crude loading in August than July after falling European demand depressed prices, traders told Reuters.
- US oil and gas rigs rose 7 in the week to 544 according to Baker Hughes. This was down 45 y/y. Oil rigs were down 2 w/w and down 60 y/y to the lowest since September 2021. Canadian rigs were up 10 w/w, down 39 y/y. Canadian oil rigs were up 8 w/w, down 10 y/y.
- Diesel cracks have erased their previous gains to plunge before the close, after the EU sanctioned India’s Vadinar refinery, which will likely halt product flows from the refinery to Europe, amid an already tight summer diesel market. Gasoline cracks are under pressure, with product price gains outpaced by crude.
- WTI Aug futures were down 0.3% at $67.34
- WTI Sep futures were down 0.3% at $66.04
- RBOB Aug futures were down 0.8% at $2.15
- ULSD Aug futures were down 0.5% at $2.45
- US gasoline crack down 0.5$/bbl at 23.13$/bbl
- US ULSD crack down 0.4$/bbl at 35.77/bbl
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US TSYS: Update Post-FOMC - Chair Powell Presser Starts
Jun-18 18:32
- Treasury futures reversed initial post-FOMC move to new highs, back near open levels as Chairman Powell's press conference gets underway.
- Tsy Sep'25 10Y futures currently +4.5 at 110-31.5 vs. 111-08 high (10Y yld at 4.3632% vs. 4.3377% low), key resistance and its recent high of 111-14+, a Fibonacci retracement and the Jun 5 high. Clearance of this hurdle would be bullish and highlight a stronger reversal. This would open 111-30, a Fibonacci retracement.
- Curves steeper, 2s10s +2.007 at 45.290, 5s30s +1.945 at 91.757.
- Cross asset: Stocks firmer (SPX eminis +18 at 6056.5), Gold mildly higher at 3389.15, Bbg US$ index lower at 1206.87 -2.20.
USDJPY TECHS: Trend Signals Remain Bearish
Jun-18 18:30
- RES 4: 150.49 High Apr 2
- RES 3: 149.28 High Apr 3
- RES 2: 147.67/148.65 High May 14 / 12 and a reversal trigger
- RES 1: 145.46/146.28 High Jun 11 / High May 29 and key resistance
- PRICE: 144.74 @ 15:52 BST Jun 18
- SUP 1: 142.80/12 Low Jun 11 / Low May 27 and a key support
- SUP 2: 141.96 76.4% retracement of the Apr 22 - May 12 bull leg
- SUP 3: 139.89 Low Apr 22 and a bear trigger
- SUP 4: 138.82 1.50 proj of the Feb 12 - Mar 11 - 28 price swing
USDJPY is holding on to its most recent gains. A bearish trend condition remains intact and recent gains are considered corrective. Moving average studies are in a bear-mode position highlighting a dominant downtrend. A resumption of weakness would open 142.12, the May 27 low. On the upside, key short-term resistance is 146.28, the May 29 high. First resistance is 145.46, Jun 11 high.
FED: Statement: A Little Less Uncertainty, But Still High
Jun-18 18:23
There were only limited changes to June's FOMC statement versus May's (PDF link).
- The characterization of the unemployment rate is basically the same, now simply "remains low" instead of "has stabilized at a low levels in recent months". Also as expected, the Committee notes now that uncertainty about the economic outlook has "diminished but remains elevated", versus "increased further", suggesting reduced uncertainty vs the May meeting.
- The Statement also keeps "The Committee is attentive to the risks to both sides of its dual mandate" but removes the following "and judges that the risks of higher unemployment and higher inflation have risen."
- It's quite likely Chair Powell will characterize these changes as being mark-to-market and removing dated/redundant phrasing rather than reflective of a major change in view on economic conditions, but it will be interesting to hear how he describes the decision - it does sound as though the FOMC is less concerned than it was 6 weeks ago about recession risks for example.
