AMERICAS OIL: WTI crude prices ended near unchanged today
August 8 - Americas End-of-Day Oil Summary: WTI crude prices ended near unchanged today amid late short covering after having traded lower on some signs of progress towards a peace agreement in Ukraine and are nonetheless on track for a net weekly decline with the market focused on the risk of oversupply amid rising OPEC+ output and higher US tariffs on India.
- Washington and Moscow are aiming to reach a deal that would lock in Russia’s territorial gains in Ukraine, according to Bloomberg, with the report slightly easing supply risks amid US threats of further Russian sanctions.
- A Trump-Putin meeting is tentatively being planned for the end of next week, according to Fox News reporter Jacqui Heinrich.
- This week Trump announced a doubling of tariffs on Indian imports to 50% as a penalty for the ongoing purchase of Russian oil, prompting local state-owned oil refiners to pull back from purchases and look elsewhere.
- IOC and BPCL have bought at least 22mbbl of non-Russia crude for Sep./Oct delivery, Reuters sources said.
- Indian refiners’ race to buy alternative grades to replace Russian oil hasn’t yet boosted West African crudes, traders involved in the market told Bloomberg.
- Reliance Industries is likely to shift back to its traditional Middle Eastern sources for oil if India yields to pressure from US President Trump to cut Russian imports, trade sources told Reuters.
- ExxonMobil Guyana started production at Yellowtail today, the fourth oil development in Guyana’s offshore Stabroek block, according to a company statement.
- OPEC+ is “likely to keep targets flat until 2Q26 after completing output increases in September” as a stronger market outlook allays the need for new cuts, FGE analysts said in a note cited by Bloomberg.
- The Baker Hughes US oil rig count was up 1 w/w to 411; Canadian oil rig count was down 2 w/w to 122
- US cracks are higher, with product pricing higher amid overall tightness in inventories globally while crude oil was slightly lower.
- WTI Sep futures were down 0% at $63.88
- WTI Oct futures were down 0.1% at $62.97
- RBOB Sep futures were up 0.3% at $2.09
- ULSD Sep futures were up 0.5% at $2.28
- US gasoline crack up 0.2$/bbl at 23.68$/bbl
- US ULSD crack up 0.7$/bbl at 31.85/bbl
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FED: More Participants Think Rates May Not Be Far From "Neutral"
One hawkish note to the a largely unsurprising set of Fed minutes - we took note that "several participants commented that the current target range for the federal funds rate may not be far above its neutral level".
- The last time participants' comments on the neutral level was noted in the minutes was in January's edition, when only "a few" said the same thing - and the Fed funds rate hasn't changed since then.
- While the estimated range of the neutral range is notoriously wide, this shift in language could suggest that participants may be eyeing a slightly higher end-point than they had previously.
- It also adds to this comment from Chair Powell at his congressional testimony last month in which he suggested that the "neutral" level of rates could start in just "a couple" of cuts from here: "If you just look in the rearview mirror and look at the existing data that we've seen, you could make a good argument that it would call for us to be at a neutral level, which would be a couple of cuts or maybe more."
USDJPY TECHS: Continues To Appreciate
- RES 4: 149.28 High Apr 3
- RES 3: 148.65 High May 12 and a reversal trigger
- RES 2: 148.03 High Jun 23
- RES 1: 147.18 Intraday high
- PRICE: 146.46 @ 16:46 BST Jul 9
- SUP 1: 145.83 Low Jul 8
- SUP 2: 145.02 50-day EMA
- SUP 3: 144.23/142.68 Low Jul 7 / 1
- SUP 4: 142.12 Low May 27 and a key short-term support
USDJPY continues to appreciate and maintains a firmer short-term tone. The latest recovery has resulted in a breach of the 50-day EMA, highlighting a stronger reversal. 146.77, 76.4% of the Jun 23 - Jul 1 bear leg, has been pierced, a clear break of this level would open 148.03, the Jun 23 high. Support to watch is 145.02, the 50-day EMA. A clear breach of the average would be bearish.
STIR: Projected Rate Cuts Steady to Pre-Minutes Levels
- Projected rate cut pricing has gained momentum vs morning (*) levels: Jul'25 at -1.7bp (-1.2bp), Sep'25 at -18.6bp (-17.3bp), Oct'25 at -33.7bp (-31.7bp), Dec'25 at 52bp (-49.3bp).
