AMERICAS OIL: WTI Crude markets have weakened amid oversupply concerns
Mar-05 19:38
March 5 - Americas End-of-Day Oil Summary: WTI Crude markets have weakened amid oversupply concerns after OPEC’s decision to move ahead with its April output hike, a larger than expected rise in EIA crude inventories, and expectations for weaker global demand along with increased trade protectionism.
- US crude inventories rose by 3.6mbbl driven by a decline in refinery runs and despite a small drop in imports while exports held above 4mb/d. Refineries cut utilization to 85.9% to partially reverse the increase seen the previous week but remains above last year levels.
- US President Trump warned Americans on Tuesday there could be more discomfort ahead as he pushes wide reaching sanctions he said will raise “trillions and trillions” in revenue and rebalance trading relationships he called unfair.
- A 10% tax was imposed yesterday on energy imports from Canada. In retaliation Ontario has introduced a 25% export tax on electricity going to Michigan, Minnesota and New York.
- OPEC+ oil output rose in February as Iranian exports held strong, despite renewed US attempts to curb flows, while Nigeria boosted output above its target, according to a Reuters survey.
- Enbridge plans to add 300k b/d of new capacity to its Mainline crude oil system to meet growing demand from Western Canada to the US Midwest and the USGC, Platts reported.
- US tariffs on Canada and Mexico are bullish for gasoline and diesel, but bearish for HSFO and heavy crude, Platts said.
- Mexican President Sheinbaum said about the tariffs, “there is no reason, justification or excuse that supports this decision that will affect our people and nations.”
- Phillips 66’ 258,500 b/d Bayway refinery in Linden, New Jersey, is undergoing a major turnaround, research company IIR energy said on Wednesday. Maintenance began in mid-February and is expected to last 50 days.
- Canadian light crude strengthened with Bloomberg reporting Edmonton Mixed Sweet crude’s discount to WTI in Alberta narrowed to $5.50/bbl from $6.40 at the end of day Tuesday.
- US President Trump and Canadian Prime Minister Trudeau held a call that did not yield a result though discussions were continuing and Commerce Secretary Lutnick said Trump was leaning towards exclusion of USMCA goods. The White House announced a one-month exemption would be granted to any autos coming through USMCA.
- The NOAA 6–14-day outlook is net bearish through Mar 18 for heating demand with below-normal conditions forecast in the Southwest and northern Maine, but milder conditions expected from the Great Plains to the Midwest shifting east later in the forecast. The West Coast cools late in the forecast period. Elevated heating demand is likely in PADDs 4 and 5, with below normal demand in most of PADDs 1-3.
- Cracks fell despite larger-than-expected stock draws but amid demand concerns related to the impact of tariffs and slowing economic growth.
- WTI Apr futures were down 3.0% at $66.24
- WTI May futures were down 2.7% at $65.84
- RBOB Apr futures were down 2.8% at $2.13
- ULSD Apr futures were down 2.1% at $2.24
- US gasoline crack down 0.8$/bbl at 23.37$/bbl
- US ULSD crack down 0.2$/bbl at 27.83$/bbl
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US STOCKS: Late Equities Roundup: Near Full Recovery, Mexico Tariff Delay
Feb-03 19:31
- US Stocks have been climbing off this morning's lows ever since Mexican President Sheinbaum said tariffs are paused for a month from now, having said Mexico had a "good" call with Trump, which led to some "accords".
- The Trump administrations quixotic trade policies remain uncertain for Canada, China and the EU for that matter amid mixed negotiation headlines Monday after Trump signed orders for 25% tariffs over the weekend on Mexico & Canada, 10% on China.
- Currently, the DJIA trades down 0.94 points (0%) at 44545.04, S&P E-Minis down 25.75 points (-0.42%) at 6041, Nasdaq down 154.9 points (-0.8%) at 19473.01.
- Health Care and Consumer Staples sectors continued to lead gainers in late trade, IDEXX surged +11.2% after beating earnings and providing positive 2025 guidance, Molina Healthcare +3.86%, AbbVie +3.46%. The Consumer Staples sector was buoyed by Kroger +2.7%, Costco +2.69%, Tyson Foods +1.98%.
- Conversely, Information Technology and Consumer Discretionary sectors continued to underperform: tech laggers included Super Micro Computer -4.14%, Apple -3.22% while Dell declined 3.13%. Weighing on the Consumer Discretionary sector: Tesla -5.01%, Wynn Resort -3.59%, NVR -3.31%.
- Reminder, another heavy earnings docket this week includes the following on Monday-Tuesday: PepsiCo Inc, Archer-Daniels-Midland Co, Snap Inc, Alphabet, Match Group, Amgen Inc, Advanced Micro Devices, Lumen Technologies, Chipotle Mexican Grill, Juniper Networks Inc.
USDJPY TECHS: Resistance Remains Intact
Feb-03 19:30
- RES 4: 159.45 High Jul 12
- RES 3: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing
- RES 2: 158.08/87 High Jan 15 / 10 and the bull trigger
- RES 1: 156.75 High Jan 23
- PRICE: 154.62 @ 16:48 GMT Feb 3
- SUP 1: 153.72/34 Low Jan 27 / Low Dec 18
- SUP 2: 152.55 61.8% retracement of the Dec 3 - Jan 10 bull leg
- SUP 3: 151.81 Low Dec 12
- SUP 4: 151.06 76.4% retracement of the Dec 3 - Jan 10 bull leg
The primary trend condition in USDJPY is bullish. However, the Jan 27 move down highlights a stronger bear threat. The pair has breached the 50-day EMA and a trendline drawn from the Sep 16 ‘24 low. A resumption of weakness would open 152.55, a Fibonacci retracement point. Initial firm resistance is at 156.75, the Jan 23 high. Clearance of this hurdle would be a bullish development.
EUROPEAN INFLATION: 2025 Weightings Update Marginally Decreased Inflation in Jan
Feb-03 19:23
The January 2025 Eurozone HICP flash release also contained a weightings update for the main categories (which we thought would only come with the final data). We estimate that this update contributed a negative 0.014 percentage points to this month's flash release when looking at the latest monthly changes (of -0.28% M/M for HICP), mostly on the back of a decrease in weighting of the energy category, which saw a sequential jump in January.
- In the coming months, however, the impact on headline inflation of the reweighting appears likely to be positive, as services, in which price growth is currently the highest out of the main categories on the yearly rate, received a weighting boost of around 0.75pp.
- Overall, the impact on headline inflation should be limited - that also applies for a weightings update of the subcategories, which appears yet to be released.
- Weighting comparison table see below:
