AMERICAS OIL: WTI Crude Oil was weaker today
Feb-21 19:39
February 21 - Americas End-of-Day Oil Summary: WTI Crude Oil was weaker today, driven by ongoing uncertainty around OPEC+ production, a Reuters headlines that the US pushes for a resumption of Kurdish oil exports and amid a gain in the Baker Hughes rig count to an 8-month high.
- The Baker Hughes rig count rose by 4 w/w to 592, the highest since June, though down 37 rigs or 5.9% on the year.
- US administration asked Iraq to resume Kurdish oil exports quickly or face sanctions alongside Iran – sources told Reuters.
- State media reporting comments from Kremlin spox Dmitry Peskov. Says that "there is the understanding of the need for a Trump-Putin meeting" but that there are "no concrete details yet."
- Commerzbank Research commodity analyst Carsten Fritsch says, "the implied volatility for Brent is as low as it was last seen in the summer of 2024. Despite all the conflicts, there have been no significant supply shortfalls, sanctions have been circumvented and demand is rising less at the same time."
- OPEC+ is widely expected to delay plans to return halted oil production for a fourth time. A Bloomberg survey showed more than 70% of respondents expect OPEC will postpone the output increase scheduled for April by between one to three months.
- OPEC+ is expected to delay its planned April production increase amid economic and geopolitical uncertainties, according to ANZ Group.
- Nigeria is scheduled to ship 190k b/d of Qua Iboe crude in April up from 123k b/d in March, the highest since Jan. 2024, according to Bloomberg.
- Bloomberg reports US-bound supertankers rose to the highest in almost four months, according to vessel-tracking data compiled by Bloomberg. The flow to India climbed to the highest since January 2023.
- The US diesel crack fell to reverse gains seen yesterday amid stronger draws in US distillate stocks, while refiners may be switching to maximize diesel runs. is holding most of its previous gains on the day amid a near expectation draw. Production was up on the week by 180k b/d, with Bloomberg noting that refiners are likely switching to maximize diesel given recent cold snaps.
- Pemex’s 245kb/d Salamanca refinery in Mexico postponed restart of a crude unit after repairs were completed because of a high water and salt content problem in the local crude supply.
- The NOAA 6–14-day outlook is unsupportive for heating demand through Mar 6 with below-normal conditions forecast in Florida and the upper Northeast region, but milder conditions across the western two-thirds, though the Northeast and Midwest cool in early March. Elevated heating demand is thus likely in the southern part of PADD 1, spreading north, with below normal demand in most of PADDs 2-5.
- WTI Mar futures were down 2.9% at $70.33
- WTI Apr futures were down 2.9% at $70.17
- RBOB Mar futures were down 2.8% at $2.03
- ULSD Mar futures were down 2.7% at $2.44
- US gasoline crack down 0.2$/bbl at 24.79$/bbl
- US ULSD crack down 0.5$/bbl at 29.62$/bbl
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US STOCKS: Late Equities Roundup: Holding Near Record Highs, Earnings Resume
Jan-22 19:37
- Stocks are drifting near midday highs late Wednesday semiconductor stocks helping SPX Eminis climb back near early December all-time highs (6178.75).
- Currently, the DJIA trades up 110.69 points (0.25%) at 44137.46, S&P E-Minis up 41.25 points (0.68%) at 6126, Nasdaq up 251.1 points (1.3%) at 20009.01.
- Information Technology and Communication Services sectors continued to outperform in the second half, chip stocks supporting the former as noted: Monolithic Power +8.53%, Nvidia +4.63%, Lam Research +3.66%, while Applied Materials gained 3.01%.
- Interactive media and entertainment stocks led gainers in the Communication Services sector: Netflix still up over 10% after some profit taking in the second half as subscriptions soar, Warner Bros +2.35%, Meta +1.77%.
- On the flipside, Utilities and Real Estate sectors continued to underperform in late trade, gas and multi-energy providers weighing on the former: Dominion Energy -4.54%, PG&E -3.01% while Edison International declined 3.63%.
- Investment trusts, particularly health care and industrial REITs weighed on the Real Estate sector: Ventas -2.95%, Healthpeak Properties -2.56% and Prologis -2.0%.
- Earnings expected to be announced after the close include: Steel Dynamics, Discover Financial Services, Hexcel Corp, Alcoa Corp, Knight-Swift Transportation and Kinder Morgan Inc.
US TSY OPTIONS: Large Low Delta 10Y Put Buy, Opener
Jan-22 19:36
- +50,000 TYH5 102 puts 1 ref 108-18. Total volume in the OTM put only 2,900 coming into the session.
FED: MNI Hawk-Dove Spectrum Shifts, Easing Bias Remains Overall (2/2)
Jan-22 19:23
We’ve updated our Hawk-Dove Spectrum for 2025, with the rotation of regional president voters bringing in Chicago Fed’s Goolsbee (dove), KC’s Schmid (hawk), St Louis’s Musalem (hawk), and Boston’s Collins (neutral/dove) for 2024. (Out are the neutral/hawkish Bostic and Barkin, hawk Hammack, and neutral/dovish Daly).
- All participants remain on the dovish side of the Hawk-Dove line in absolute terms, reflecting the Committee’s overall easing bias.
- However most of the Dots have been moved in a more hawkish direction in the last 6 weeks, in light of the more limited cuts seen in the December Dot Plot and the growing sentiment that the FOMC can remain patient in deciding when to cut next.
- We now regard Hammack as the FOMC’s biggest hawk, though only marginally over her colleagues Bowman, Schmid and Musalem.
- Conversely, Gov Waller has ensconced himself as one of the pre-eminent doves on the Committee, seeing potential for 3-4 cuts this year, and possibly restarting the easing cycle earlier than market pricing implies (though he spoke after the December CPI data).
