AMERICAS OIL: WTI crude is lower on the day
August 4 - Americas End-of-Day Oil Summary: WTI crude is lower on the day, though has reversed steeper losses after Trump said he will be ‘substantially raising’ the tariff rate on India due to its purchases of Russian oil. Excess supply fears amid economic concerns and another widely expected OPEC+ output hike have weighed through the session.
- Fears of Russian supply disruption have been growing in recent weeks with threats to raise tariffs from both Trump and other key US officials.
- US July payrolls disappointed and showed sharp downward revisions to May/June, while a significant pickup in the US effective tariff was confirmed.
- OPEC agreed to increase output by 547kb/d in September, above the 411k agreed for August to complete the unwinding of the 2023 voluntary-cuts. There is still another 1.66mb/d of reductions not due to be unwound until 2026 but OPEC says it is keeping its options open, according to Bloomberg.
- Goldman Sachs is not expecting any further OPEC production increases as the market is well supplied and has left its Q4 2025 Brent forecast at $64/bbl and 2026 at $56/bbl.
- Ukraine military claimed strikes on two Russian oil refineries, Novokuibyshevsk and Ryazan, as well as other oil infrastructure, Bloomberg said.
- US President Trump said special envoy Steve Witkoff will go to Russia this week amid threats of sanctions on Russia if a ceasefire with Ukraine is not reached.
- India’s Oil Corp (IOC), the country’s top refiner, has bought 7m bbl of September-arrival crude from the US, Canada and the Middle East via a tender, according to Reuters trade sources.
- US WTI Midland crude is more expensive in Northwest Europe amid rising freight rates, although the arb to Asia remains unchanged, according to Sparta Commodities cited by Bloomberg.
- US crude oil inventories are expected to have fallen by 1.8m bbl in the week to Aug 1, according to a Reuters preliminary survey. Distillates were seen up 1.1m bbl and gasoline was seen down 1.1m bbl. Refinery runs were seen down 0.2%.
- US cracks are higher amid various signs of refinery disruption and Trump’s announcement of higher tariffs on India, with products outpacing gains in pricing.
- WTI Sep futures were down 1.5% at $66.29
- WTI Oct futures were down 1.3% at $65.32
- RBOB Sep futures were down 0.8% at $2.10
- ULSD Sep futures were up 0.7% at $2.32
- US gasoline crack up 0.7$/bbl at 22.00$/bbl
- US ULSD crack up 2.2$/bbl at 31.01/bbl
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USDCAD TECHS: Trend Outlook Remains Bearish
- RES 4: 1.4111 High Apr 4
- RES 3: 1.4016 High May 12 and 13 and a key resistance
- RES 2: 1.3920 High May 21
- RES 1: 1.3674/3776 20- and 50-day EMA values
- PRICE: 1.3607 @ 16:12 BST Jul 4
- SUP 1: 1.3557 Low Jul 03
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
The trend needle in USDCAD points south and this week’s move down reinforces current conditions. S/T gains between Jun 16 - 23 appear to have been corrective. Key support and the bear trigger is 1.3540, Jun 16 low. Clearance of this level would resume the downtrend and open 1.3503, a Fibonacci projection. Pivot resistance is at the 50-day EMA, at 1.3776. A clear break of this average would signal scope for a stronger recovery.
AUDUSD TECHS: Bull Cycle Remains In Play
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6603 High Nov 11 ‘24
- RES 1: 0.6590 High Jul 01
- PRICE: 0.6548 @ 16:05 BST Jul 04
- SUP 1: 0.6521 20-day EMA
- SUP 2: 0.6468/6373 50-day EMA / Low Jun 23 and a reversal trigger
- SUP 3: 0.6357 Low May 12
- SUP 4: 0.6275 Low Apr 14
The trend set-up in AUDUSD remains bullish and the pair is holding on to its recent gains. The latest break higher maintains the bullish price sequence of higher highs and higher lows, the definition of an uptrend. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 0.6603 next, the Nov 11 2024 high. Key short-term support has been defined at 0.6373, the Jun 23 low.
EURJPY TECHS: Northbound
- RES 4: 171.88 High Jul 19 ‘24
- RES 3: 171.28 1.382 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 2: 171.09 High Jul 23 ‘24
- RES 1: 170.61 High Jul 03
- PRICE: 170.22 @ 16:04 BST Jul 04
- SUP 1: 169.04 Low Jul 02
- SUP 2: 167.87 20-day EMA
- SUP 3: 167.13 Low Jun 20
- SUP 4: 165.66 50-day EMA
EURJPY traded higher on Thursday resulting in a print above 170.47, the 76.4% retracement of the Jul 11 - Aug 5 sell-off. A clear break of this price point would strengthen bullish conditions and signal scope for extension. This would open 170.28 next, a Fibonacci projection. The trend is overbought, a pullback would unwind this condition. Support to watch lies at 167.87, the 20-day EMA.
