OIL: WTI crude has reversed earlier declines and is slightly higher on the day
Jul-30 18:36
July 30 - Americas End-of-Day Oil Summary: WTI crude has reversed earlier declines and is slightly higher on the day, supported by the potential for further US action against Russia amid Trump’s 10-day deadline. The Fed left rates unchanged as expected with two dissents, and there was little market reaction.
- Polish PM Tusk said he had seen ‘signals’ that the Russia-Ukraine war might be ‘suspended.'
- The market is watching for any signs of progress towards a peace agreement that could see Russia avoid Trump’s threat of sanctions/secondary tariffs as part of his 10-day deadline.
- Focus is also on the risk of supply disruption from further sanctions on Russian oil, but President Trump doesn’t appear concerned about supply suggesting the US will increase its oil output.
- U.S. Treasury Secretary Scott Bessent said on Tuesday he warned Chinese officials that continuing to buy Russian oil would lead to big tariffs due to legislation in Congress.
- OPEC is also expected to increase its production target for September at its August 3 meeting.
- BP said on Wednesday it was continuing its extensive quality assessment of Azeri BTC oil by taking samples before each loading at the terminal, Reuters reports.
- Russia’s flagship Urals crude is trading at its narrowest discount relative to benchmark prices since the Kremlin started its war against Ukraine in 2022, Bloomberg reports.
- Premiums for Russia’s ESPO blend crude oil loading from Russia’s Kozmino port in late Aug/ early Sep for delivery to China are holding firm despite threats of US tariffs, Reuters said.
- US crude inventories for the week to July 25 unexpectedly rose by 7.70mb/d, driven by another big drop in exports to just below 2.7mb/d
- MNI Oil Weekly: {https://enews.marketnews.com/ct/x/pjJsdgaJle4I6axkIR5-Tw~k1zZ8KXr-kA8x67BW5SmptIPjO1OcQ}
- US cracks are mixed as gasoline cracks were supported by a higher than expected stock draw in today’s EIA report, while diesel cracks faced continued pressure with a higher than expected build in EIA data, somewhat in line with API data yesterday.
- WTI Sep futures were up 1.2% at $70.00
- WTI Oct futures were up 1% at $68.97
- RBOB Aug futures were up 2.4% at $2.27
- ULSD Aug futures were down 2% at $2.42
- US gasoline crack up 0.3$/bbl at 22.44$/bbl
- US ULSD crack down 2.4$/bbl at 31.25/bbl
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USDJPY TECHS: Bearish Threat
Jun-30 18:30
- RES 4: 150.49 High Apr 2
- RES 3: 149.28 High Apr 3
- RES 2: 148.65 High May 12 and a reversal trigger
- RES 1: 146.19/148.03 High Jun 24 / 23
- PRICE: 144.16 @ 17:02 BST Jun 30
- SUP 1: 143.75 Low Jun 26
- SUP 2: 142.80 Low Jun 13
- SUP 3: 142.12 Low May 27 and a key short-term support
- SUP 4: 141.96 76.4% retracement of the Apr 22 - May 12 upleg
A bear threat in USDJPY remains present. The Jun 23 shooting star candle formation highlights a reversal of the recent recovery and price has traded through the 20- and 50-day EMAs. A clear break of the averages would strengthen a bearish threat and signal scope for an extension towards 142.12, the May 27 low and a key short-term support. On the upside, a move above 148.03, the Jun 23 high, would reinstate a bullish theme.
US TSY OPTIONS: Late Aug'25 & Sep'25 10Y Calls
Jun-30 18:28
- +30,000 TYU5 112 calls, 1-04 ref 112-03
- +12,500 TYQ5 113 calls, 21 ref 112-02.5
US DATA: June Chicago Fed Index Points To Weaker Services, But Factory Bounce
Jun-30 18:23
The Chicago Fed Survey of Economic Conditions (CFSEC)' activity index showed a dip in June to -3 from -1 prior, indicating "that economic growth was near trend", per the report.
- There was a divergence in sectors: manufacturing activity index rose to +6 vs -21 prior, marking a 3-month high, but nonmanufacturing weakening to a 2-month low -9 vs +13 prior.
- As such, regional nonmanufacturing firms' activity is pulling back to levels seen through most of 2024. Like the MNI Chicago Business Barometer, the CFSEC manufacturing index remains around levels seen through much of 2024-25, though the Chicago Fed's index shows relatively better improvement over the last month. Overall hiring plans, capex and the broader outlook are mired in negative territory.
- The report suggests labor cost pressures are as low as they've been since the start of the recovery from the pandemic bottom, though overall nonlabor price pressures are slightly elevated vs late 2024.
- Other highlights from the report:
- "Respondents’ outlooks for the U.S. economy for the next 12 months deteriorated, and remained pessimistic on balance. Fifty-three percent of respondents expected a decrease in economic activity over the next 12 months. The pace of current hiring decreased, and respondents’ expectations for the pace of hiring over the next 12 months were unchanged. Both hiring indexes remained negative.
- "Respondents’ expectations for the pace of capital spending over the next 12 months increased, but the capital spending expectations index remained negative. The labor cost pressures index decreased, as did the nonlabor cost pressures index. Both cost pressures indexes remained negative."
