AMERICAS OIL: WTI crude is slightly higher today after recovering from yesterday
May 16 - Americas End-of-Day Oil Summary: WTI crude is slightly higher today after recovering from yesterday’s low as the market weighs progress in US-Iran talks, though sentiment from Trump has been markedly more optimistic than Iranian rhetoric so far.
• Front month crude prices are still on track for a net gain on the week after earlier support from easing of trade tensions following temporarily lower US-China tariffs.
• President Trump said that the US and Iran are edging closer to a deal which some analysts suggest could potentially see an increase in Iranian exports by 200k to 400kb/d.
• Iran Foreign Minister Araghchi said they are hearing many contradictory positions from the US negotiators.
• Direct negotiations between delegations from Russia and Ukraine took place today, with limited signs of progress towards a ceasefire deal.
• OPEC+ is expected to maintain oil production increases in July to discipline nations exceeding their quotas and to show support for President Trump’s appeals for lower oil prices, according to Macquarie Group cited by Bloomberg.
• Discounts for Russian Urals oil cargoes loading in June widened slightly to dated Brent from levels for May-loading volumes, Reuters reports citing three traders.
• Nigeria’s Trans Niger Pipeline burst and spilled oil, Reuters reports citing an environmentalist rights group, putting Bonny Light exports at risk.
• Egypt is buying large amounts of oil to run its power plants due to the high cost of natural gas, Bloomberg reports.
• US oil exports dropped 10% to 3.76mb/d in the four weeks through May 9, the slowest pace since January amid the global trade war, reduced refinery capacity, and an increase in cheap Middle Eastern barrels.
• North Dakota produced 2.293 mb/d of oil in March according to state data.
• The Baker Hughes rig count was down 2 w/w at 76, while oil rigs were down 1 w/w at 473, down 24 y/y. Canadian rigs were up 7 w/w at 121, up 1 y/y. Canadian oil rigs were up 6 to 74, up 17 y/y.
• US cracks are softer today, with diesel reversing most of the gains seen earlier in the week after supportive EIA data.
- WTI June futures were up 1.4% at $62.48
- WTI July futures were up 1.3% at $61.96
- RBOB Jun futures were up 0.3% at $2.14
- ULSD Jun futures were down 1.1% at $2.14
- US gasoline crack down 0.6$/bbl at 27.47$/bbl
- US ULSD crack down 1.8$/bbl at 27.48$/bbl
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Historical bullets
USDJPY TECHS: Southbound
- RES 4: 151.30 High Mar 3
- RES 3: 149.10/151.21 50-day EMA / High Mar 28 and reversal trigger
- RES 2: 146.95 20-day EMA
- RES 1: 144.64/146.54 High Apr 11 / Low Mar 11 recent breakout point
- PRICE: 142.50 @ 15:59 BST Apr 16
- SUP 1: 142.05 Low Apr 16 and bear trigger
- SUP 2: 141.65 Low Sep 30 ‘24
- SUP 3: 141.00 1.236 proj of the Feb 12 - Mar 11 - 28 price swing
- SUP 4: 140.32 Low Sep 17 ‘24
The trend condition in USDJPY remains bearish and the pair is trading at its recent lows. Recent weakness confirms a resumption of the downtrend and maintains the price sequence of lower lows and lower highs. Note too that moving average studies are in a bear-mode position highlighting a dominant downtrend. Sights are on 141.65 next, the Sep 30 ‘24 low. Initial firm resistance to watch is the 20-day EMA, at 146.95.
US TSYS: Chairman Powell Concludes Economics Club of Chicago Speech
- Treasuries have scaled back from recent session highs as Chairman Powell has concluded his speech at the Economics Club of Chicago event.
- Tsy Jun'25 10Y trades +8.5 at 111-11 vs. 111-13.5 high, yield 4.2903% -.0427. Curves steeper but off highs: 2s10s +1.179 at 49.569.
- Stocks are still broadly weaker - but off lows at the moment, SPX eminis at 5311.0 (-116.75) Energy sector shares outperforming with crude higher (WTI +.88 at 62.21).
STIR: Dec'25 SOFR Volatility Seller
- -3,000 SFRZ5 96.56 straddles, 70.0 ref 96.55
