AMERICAS OIL: WTI crude has rebounded back to levels seen late last week
May 6 - Americas End-of-Day Oil Summary: WTI crude has rebounded back to levels seen late last week amidst signs of rising tensions in the Middle East, while the market continues to digest oversupply risks after OPEC+ decided on a large output hike for June.
- The IDF claimed the attack on May 6 destroyed Houthi infrastructure including a strike on the Sanaa International Airport and targets in the Hudaydah Port, BBC said.
- Iran is scheduled to hold indirect nuclear talks with the US on May 11.
- Recent legislative developments and comments from the Trump administration suggest that the US may be inching toward new sanctions to motivate Russia to strike a peace deal, Platts reports.
- India has doubled its crude purchases from the US amidst higher availability of WTI cargoes owing to sluggish purchases by China, Platts reports.
- Sweet crude grades in the Mediterranean like Azeri Light and CPC may face downward pressure amid cheap WTI and a closed arbitrage for the region’s supply to Asia, traders told Bloomberg.
- Mexico’s Pemex is targeting crude output of 1.58 mb/d in 2025 according to Reuters. Combined crude and condensate output averaged 1.76 mb/d in 2024, falling to 1.62 mb/d in Q1 2025 as output from maturing oilfields decreases.
- President Triump hosted Canadian Prime Minister Mark Carney and posted on Truth Social beforehand that he believes the US does not need Canadian energy. In their meeting a conciliatory tone was set and Trump suggested USMCA was a “transitional deal” and could be renegotiated.
- The EIA released its May Short-Term Energy Outlook that raised its oil demand forecast slightly for 2025 by 01 mb/d to 103.7 mb/d. Total global production was kept steady at 104.1 mb/d in 2025, for a supply surplus of 0.4 mb/d. WTI is seen averaging $61.81/bbl this year and $55.24 in 2026.
- US cracks are lower with a rise in underlying crude prices outpacing gains in refined products.
- WTI June futures were up 3.4% at $59.09
- WTI July futures were up 3.4% at $58.67
- RBOB Jun futures were up 2.1% at $2.06
- ULSD Jun futures were up 1.7% at $2.01
- US gasoline crack down 0.3$/bbl at 27.62$/bbl
- US ULSD crack down 0.7$/bbl at 25.28$/bbl
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUSSIE 10-YEAR TECHS: (M5) Strong S/T Bounce
- RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
- RES 1: 95.915 - High Apr 4
- PRICE: 95.860 @ 16:42 GMT Apr 04
- SUP 1: 95.420/95.300 - Low Feb 13 / Low Jan 14
- SUP 2: 95.275 - Low Nov 14 (cont) and a key support
- SUP 3: 94.640 - 1.0% 10-dma envelope
Aussie 10-yr futures extended a recent strong bounce through to the Friday close, putting prices through the top end of the recent range. The confirmed breach of 95.851, the Dec 11 high on the continuation contract, reinstates a bull cycle and focuses attention on resistance at 96.207, a Fibonacci retracement point. A stronger bearish theme would expose 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish condition.
USDCAD TECHS: Bearish Structure
- RES 4: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- RES 3: 1.4415 High Apr 1
- RES 2: 1.4308 50-day EMA
- RES 1: 1.4242 High Apr 4
- PRICE: 1.4196 @ 17:10 BST Apr 4
- SUP 1: 1.4028 Low Apr 3
- SUP 2: 1.3986 Low Dec 2 ‘24
- SUP 3: 1.3944 61.8% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 4: 1.3894 Low Nov 11 ‘24
USDCAD rallied Friday, but remains lower on the week after Thursday’s downleg. The move down has confirmed a clear reversal of the bull cycle between Sep 25 ‘24 and Feb 3. Price is through a key support at 1.4151, the Feb 14 low. This signals scope for an extension towards 1.3944, a Fibonacci retracement. On the upside, key short-term resistance is seen at 1.4308, the 50-day EMA.
CANADA DATA: Unexpected Jobs Contraction Boosts Implied April BOC Cut Chances
Canadian employment unexpectedly contracted in March, falling by the most since January 2022 at -32.6k (+10.0k expected, +1.1k prior) in a sign that the trade war with the US is spilling over increasingly into the "hard" data. The unemployment rate ticked up 0.1pp to 6.7%, in line with expectations and below the November 6.9% high, though unrounded it rose from 6.55% to 6.71% - the largest increase since November.
- The drop in employment was largely due to a 62.0k drop in full-time positions (after -19.7k, the 2nd straight drop), with part-time up for the 4th consecutive month at 29.5k (after 20.8k prior) - that mix is clearly indicative of hiring uncertainty among firms.
- The monthly full-time drop was the 2nd largest since the pandemic lows in the labour market (April 2020). Goods producing jobs fell by 12k (2nd consecutive decline), while services shed 21k (wholesale/retail trade and Information, culture and recreation led losses).
- The participation rate dipped 0.1pp to 65.2%.
- Wages were soft, dropping 0.2% M/M for the first drop since November, with the Y/Y rate slipping to 3.6% from 3.8% prior. The rise in permanent employees' wages of 3.5% Y/Y was well below the 4.1% expected (4.0% prior).
- Market-implied probability of an April BOC rate cut rose to as high as 68% after the data before settling the day at around 55%. That compares to 40% prior to Wednesday's US tariffs announcement.
