AMERICAS OIL: WTI crude pared some of its rally after Trump’s Truth post
May 9 - Americas End-of-Day Oil Summary: WTI crude pared some of its rally after Trump’s Truth post on a possible 80% tariff on China dented growing optimism on loosening global trade barriers.
- Focus is on any signs that some kind of agreement from talks between the US and China with President Trump suggesting he remains positive. US Treasury Secretary Bessent and Trade Representative Greer will meet China’s Vice Premier Lifeng in Switzerland on Saturday.
- Donald J. Trump: @realDonaldTrump “80% Tariff on China seems right! Up to Scott B.”
- Downward pressure comes from market oversupply risks from an OPEC+ led increase in supply and concerns for an impact of a global slowdown on oil demand.
- OPEC+ continues to be frustrated at Kazakhstan which again intends to exceed its OPEC+ obligations and output targets.
- OPEC oil output edged lower in April despite a scheduled output hike taking effect, according to a Reuters survey found.
- Iran and the United States will hold a fourth round of indirect nuclear talks on Sunday in Oman senior members of the Iran team tell Tasnim.
- The US Treasury yesterday added 2 individuals, 11 entities and 6 crude oil tankers to its Iran-related sanctions list, including a third teapot refinery.
- China’s crude imports came in at 48.06m mt or 11.69 m b/d in April according to official data .
- Mexico’s Pemex is planning to reopen old wells to try and stop its declining oil production rates documents seen by Reuters show.
- The OPEC+ policy shift is expected to weigh on oil prices taking the Brent forecast to $60/bbl by the end of 2025 and $50/bbl by the end of 2026, according to Capital Economics cited by WSJ.
- Baker Hughes reported US total rig count fell 6 w/w, down 26 y/y to 578 with US oil rigs at 574, down 5 on week and down 23 y/y. Canadian rigs were down 6 w/w and down 2 y/y at 114. Canadian oil rigs were down 6 w/w, up 8 y/y at 68.
- US cracks are lower despite rising flat prices for products but as crude advances faster amid improving sentiment.
- WTI June futures were up 1.9% at $61.02
- WTI July futures were up 1.8% at $60.59
- RBOB Jun futures were up 1.2% at $2.11
- ULSD Jun futures were up 1.3% at $2.07
- US gasoline crack down 0.3$/bbl at 27.53$/bbl
- US ULSD crack down 0.4$/bbl at 25.73$/bbl
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STIR: Late SOFR Option Adds
Bearish - call unwinds and vol sales:
- -10,000 0QM5 97.00/97.50 call spds, 5.0 ref 96.51 (paper +50K yesterday)
- +12,000 0QJ5 96.25 puts, 0.5 ref 96.56
- -5,000 SFRM5 96.50 calls, 4.5 ref 95.92
- +5,000 SFRJ5 96.00 calls, 2.0 ref 95.92
- -10,000 0QM5 97.00/97.50 call spds, 5.5 ref 96.535
- -4,000 SRH7 96.50 straddles, 120 ref 96.52
USDJPY TECHS: Resumes Its Downtrend
- RES 4: 151.30 High Mar 3
- RES 3: 150.16/151.21 50-day EMA / High Mar 28 and reversal trigger
- RES 2: 148.74 20-day EMA
- RES 1: 148.18 Low Mar 20
- PRICE: 144.86 @ 15:44 BST Apr 9
- SUP 1: 143.43 Low Oct 2 ‘24
- SUP 2: 142.95 1.00 proj of the Feb 12 - Mar 11 - 28 price swing
- SUP 3: 141.65 Low Sep 30 ‘24
- SUP 4: 141.00 1.236 proj of the Feb 12 - Mar 11 - 28 price swing
USDJPY is trading sharply lower Wednesday, resulting in a break of support at 144.56, the Apr 4 low and bear trigger. This 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 142.95, a Fibonacci projection. Initial firm resistance to watch is 148.74, the 20-day EMA.
US: Trump's Approval Rating Dips As Post-Tariff Surveys Filter Through
US President Donald Trump's approval rating has continued to slide as the first surveys, based on data taken after Trump's April 2 'Liberation Day' tariff announcement, filter through to polling aggregators.
- A new YouGov/Economist survey out today saw Trump's approval drop from net -3 to net -8 since last week's survey.
- Nate Silver notes: "...in the Silver Bulletin average, it looks like we’re starting to really see a post—tariff dip in Trump’s approval ratings. As of this morning, Trump has the lowest approval (46.1 percent) and highest disapproval (50.4 percent) of his second term."
- Trump's sliding approval rating adds another pressure point to Trump's hardline agenda, adding to a major period of market turbulence and increasingly vocal concerns from the Congressional Republican conference.
- A new survey from Ipsos found that, "roughly half of Americans say short-term economic pain is worth it to make the U.S. stronger in the long term (49%). This sentiment is significantly higher among Republicans (81%) compared to Democrats (23%) and independents (49%).”
Figure 1: Trump Approval Rating (SilverBulletin)
