AMERICAS OIL: WTI crude has declined today with OPEC+ moving its meeting
May 2 - Americas End-of-Day Oil Summary: WTI crude has declined today with OPEC+ moving its meeting to Saturday from May 5 raising uncertainty, adding to pressure from wider demand concerns. Threats of further sanctions on Iran and signs of a possible easing of trade tensions between the US and China have been supportive.
- OPEC+ has brought forward its video conference to discuss June production levels to Saturday, according to Bloomberg. It is scheduled for noon Vienna time and market expectations are generally for a large output hike.
- OPEC+ production fell by 200kb/d in April due to the winding down of operations in Venezuela by US producers.
- China’s Commerce Ministry said in a statement on Friday that it was evaluating recent messages by the US “hoping to start talks with China.”
- Trump stated that the US will sanction any nation or person who buys oil or petrochemicals from Iran in breach of sanctions. The US-Iran meeting provisionally planned for Saturday May 3rd has been rescheduled according to Qatari officials.
- US officials have prepared a set of options for President Trump to increase economic pressure on Russia, Bloomberg reports citing sources.
- A prominent US Senator has stated publicly that he has the commitment of 72 colleagues on a bill to further sanction Russia and those countries that continue to source their oil from the Kremlin.
- Indian buyers are seeing a reduction in the availability of Russian oil as purchase from countries such as Turkey and Syria have increased, according to BPCL Director Finance V.R.K. Gupta.
- The Baker Hughes weekly rig count was down 3 at 584; down 19 y/y with the oil rig count down 4 to 479; down 17 y/y. The Canadian rig count was down 8 at 120; unchanged y/y with oil rigs down 7 to 74; up 14 y/y.
- OPEC+ are considering another production increase of ~400k b//d in June ahead of a videoconference to set policy May 3, Bloomberg reported citing delegates.
- Cracks diverged, with gasoline cracks lower amid economic uncertainty while diesel cracks are higher amid a firmer supply/demand balance.
- WTI June futures were down 1.5% at $58.29
- WTI July futures were down 1.4% at $57.89
- RBOB Jun futures were down 1.4% at $2.02
- ULSD Jun futures were down 0.9% at $1.99
- US gasoline crack down 0.5$/bbl at 26.51$/bbl
- US ULSD crack up 0$/bbl at 25.40$/bbl
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Historical bullets
USDJPY TECHS: Key Resistance Intact For Now
- RES 4: 152.70 50.0% retracement of the Jan 10 - Mar 11 bear leg
- RES 3: 151.30 High Mar 3
- RES 2: 150.82/151.21 50-day EMA / High Mar 28
- RES 1: 150.27 High Mar 31
- PRICE: 150.01 @ 17:04 BST Apr 2
- SUP 1: 148.70 Low Mar 31
- SUP 2: 148.18 Low Mar 20 and a key short-term support
- SUP 3: 147.42 Low Mar 13
- SUP 4: 146.54 Low Mar 11 nad the bear trigger
Near-term resistance in USDJPY remains intact. The primary trend direction is unchanged, it remains down and the latest recovery is considered corrective. Key resistance is unchanged, around the 50-day EMA, at 150.82. A clear break of this EMA would undermine the bearish theme and signal scope for a stronger rally towards 152.70, a Fibonacci retracement. The first key support to watch is 148.18, the Mar 20 low. A breach would be bearish.
TARIFFS: Trump May Announce Chinese Import Fees, "External Revenue Service":CBS
CBS News (link) reports the White House is considering the imposition of a flat fee on low-value Chinese imports, and Trump may announce the creation of the "External Revenue Service" at today's 4pm event.
- The latter wouldn't be a huge surprise - the "America First Trade Policy" executive order that started this process included a directive to the Treasury Secretary to investigate an ERS "to collect tariffs, duties, and other foreign trade-related revenues". But it could also mean we get some more detail on how the new tariff policy will be practically implemented.
- Per CBS: "President Trump is considering announcing the creation of what he calls the "External Revenue Service" on Wednesday as the White House launches his new trade agenda and collects tariff revenues from around the globe, according to sources familiar with the planning."
- "Mr. Trump is also aiming to again alter Washington's trade relationship with Beijing, and will likely charge tariffs on low-value merchandise shipped from China to individual U.S. consumers....Mr. Trump has considered attaching a fee of $25 on low-value packages from China, one of the sources told CBS News."
EURGBP TECHS: Trading Clear of Support
- RES 4: 0.8494 High Aug 26 ‘24
- RES 3: 0.8474 High Jan 20 and a key resistance
- RES 2: 0.8428/8450 High Mar 18 / 11 and the bull trigger
- RES 1: 0.8395 High Mar 24 and a key near-term resistance
- PRICE: 0.8376 @ 16:51 BST Apr 2
- SUP 1: 0.8316 Low Mar 28 and a key near-term support
- SUP 2: 0.8291 76.4% retracement of the Mar 3 - 11 bull leg
- SUP 3: 0.8251 Low Mar 4
- SUP 4: 0.8241 Low Mar 3 and a bear trigger
EURGBP is trading above last week’s low. The bear leg that started Mar 11 appears corrective and has allowed an overbought condition to unwind. MA studies are in a bull-mode position, highlighting a dominant uptrend. Support to watch is 0.8316, the Mar 28 low. A break of this level would signal scope for a deeper retracement and open 0.8290, a Fibonacci retracement. For bulls, clearance of 0.8395, the Mar 24 high, would be a bullish development.
