AMERICAS OIL: WTI crude is near unchanged overall, having reversed earlier gains
May 7 - Americas End-of-Day Oil Summary: WTI crude is near unchanged overall, having reversed earlier small gains amid increased trade optimism as the US and China agreed to start talks.
- Trump said on Tuesday the bombing of Yemen will stop as a ceasefire with the Houthis is brokered via Oman, in a move he said will stop attacks on ships.
- Risks of rising Middle East tensions from reports of Israeli military strikes on Yemen yesterday helped to offset surplus concerns from rising OPEC supply.
- Iraq has boosted its condensate output to around 160k b/d amid associated gas capture efforts, Reuters reports citing Iraq’s Minister of Oil.
- US-China trade talks will occur this week with US Treasury Secretary Bessent and Trade Representative Greer meeting China’s Vice Premier Lifeng in Switzerland on the weekend. Bessent noted that current tariff levels are “unsustainable” and that de-escalation with China needs to occur before they “can move forward”.
- API data yesterday showed a US crude stock draw of 4.49mbbl, according to Bloomberg sources. Gasoline stocks fell 1.97mbbl but distillates built 2.24mbbl.
- EIA data showed US crude inventories fell as expected by 2.03mbbl with a dip in production set against a rise in imports and small dip in exports from the previous week.
- Concerns over potential supply disruptions amid tightening US sanctions and lower oil prices prompt stockpiling by Chinese majors, while sanctioned crude imports remain near record highs, according to Vortexa.
- US cracks are lower with gasoline cracks down off EIA data that showed an unexpected rise in gasoline stocks and diesel cracks down after implied demand fell back toward average levels.
- WTI June futures were down 1.6% at $58.07
- WTI July futures were down 1.6% at $57.75
- RBOB Jun futures were down 1.8% at $2.03
- ULSD Jun futures were down 1.6% at $1.98
- US gasoline crack down 0.7$/bbl at 27.01$/bbl
- US ULSD crack down 0.5$/bbl at 24.89$/bbl
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TARIFFS: Trump-Netanyahu Joint Press Conference Underway Shortly
US President Donald Trump is shortly due to hold a joint press conference with Israeli Prime Minister Benjamin Netanyahu at the White House. LIVESTREAM. Today's visit is Netanyahu's second since Trump took office in January.
- Haaretz speculates that the meeting is designed to give Trump a political win amid the fallout from his tariffs: "The planned meeting between U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu on Monday is unusual, not only because it was arranged last minute, but mainly due to the reversal of circumstances. It isn't Netanyahu who needs Trump this time, but rather Trump who needs Netanyahu."
- The New York Times notes: "Looming over the meeting this week is a point of tension: Mr. Trump’s sweeping tariffs, which did not spare Israel. Mr. Netanyahu’s office said the two men plan to discuss the tariff issue, the war in Gaza, Israel-Turkey relations, Iran and the International Criminal Court."
- Netanyahu said on the tariffs: “I can tell you that I am the first international leader, the first foreign leader, who will meet with President Trump on the issue, which is so important to the Israeli economy. There is a long line of leaders who want this regarding their economies. I think that it reflects the special personal link, as well as the special ties between the U.S. and Israel.”
USDJPY TECHS: Trend Needle Points South
- RES 4: 151.30 High Mar 3
- RES 3: 150.43/151.21 50-day EMA / High Mar 28 and reversal trigger
- RES 2: 149.12 20-day EMA
- RES 1: 148.18 Low Mar 20
- PRICE: 147.73 @ 16:50 BST Apr 7
- SUP 1: 144.56 Low Apr 4
- SUP 2: 144.13 76.4% retracement of the Sep 16 ‘24 - Jan 10 bull leg
- SUP 3: 143.43 Low Oct 2 ‘24
- SUP 4: 142.95 1.00 proj of the Feb 12 - Mar 11 - 28 price swing
USDJPY maintains a softer tone following last week’s sharp sell-off and is trading just ahead of its recent lows. A resumption of the downtrend and a break of Friday’s 144.56 low would signal scope for an extension towards 144.13, a Fibonacci retracement point. Initial firm resistance to watch is 149.12, the 20-day EMA. Short-term gains would - for now - be considered corrective.
EURGBP TECHS: Clears Key Resistance
- RES 4: 0.8628 1.500 proj of the Mar 3 - 11 - 28 price swing
- RES 3: 0.8604 1.382 proj of the Mar 3 - 11 - 28 price swing
- RES 2: 0.8593 High Aug 14 ‘24
- RES 1: 0.8580 High Apr 7
- PRICE: 0.8571 @ 16:49 BST Apr 7
- SUP 1: 0.8432/0.8380 Low Apr 4 / 20-day EMA
- SUP 2: 0.8316 Low Mar 28 and a key near-term support
- SUP 3: 0.8299 Low Mar 5
- SUP 4: 0.8251 Low Mar 4
EURGBP maintains a bullish tone. The latest rally has resulted in a break of key resistance at 0.8474, the Jan 20 high. Clearance of this hurdle highlights an important technical breach and strengthens a bullish condition. Sights are 0.8593 next, the Aug 14 ‘24 high. On the downside, firm support lies at 0.8380, the 20-day EMA. The contract is overbought, a pullback would allow this condition to unwind.
