AMERICAS OIL: WTI crude prices have risen after US President Trump announced
July 28 - Americas End-of-Day Oil Summary: WTI crude prices have risen after US President Trump announced a new 10-12 day deadline on Russia to form a peace deal with Ukraine, adding to support from a US-EU trade deal.
- The near term Brent call volatility has followed the jump in front month future prices in reaction to the increased threat of further US sanctions on Russia.
- The EU reached an agreement with the US for tariffs of 15% except steel & aluminum which still face 50% and aircraft & parts that will have no duty. The EU agreed to buy $750bn of US energy over the remainder of President Trump’s term and invest $600bn in the US.
- Another round of US-China talks took place in Stockholm on Monday with expectations that a tariff truce will be extended, laying the groundwork for a Trump-Xi meeting later this year.
- Trump may be pushing for trade deals ahead of an upcoming Federals appeals court ruling on his authority to use “emergency powers” to impose tariffs, which he could lose, according to trade sources cited by a Fox News reporter.
- OPEC JMMC today ended with no policy recommendations. On August 3 an output decision from the OPEC-8 members will be made.
- Saudi Arabia may raise its September Arab Light OSP between $0.9-$1.05/bbl to a premium of between $3.10-$3.25/bbl, which would be the highest in five months, five refining sources said in a Reuters survey.
- Arbitrage economics for WTI crude are looking particularly attractive this week, pricing very cheaply in most key regions, Sparta Commodities analyst Neil Crosby said, cited by Bloomberg.
- A supertanker is set to deliver Iraqi crude to Nayara Energy soon in what shippers say will be the first discharge of non-Russian oil since the refiner was sanctioned by the EU, Bloomberg reports.
- US cracks are steady today with product pricing generally in line with crude though diesel cracks are losing ground as ULSD gains are outpaced by the rise in crude.
- WTI Sep futures were up 2.5% at $66.71
- WTI Oct futures were up 2.5% at $65.91
- RBOB Aug futures were up 1.0% at $2.14
- ULSD Aug futures were up 1% at $2.43
- US gasoline crack up 0.2$/bbl at 21.58$/bbl
- US ULSD crack down 0.3$/bbl at 34.19/bbl
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US FISCAL: Available "Extraordinary" Measures To Ward Off X-Date Pick Up
Treasury reported Friday that as of Jun 25 it had $130B in remaining "extraordinary" measures (of a total $378B available) to ward off an "x-date" of running out of resources before defaulting. That's the highest in 2 weeks.
- Combined with $334B cash as of Jun 25 (after a bit of a buildup after the mid-June tax deadline), that's a total of roughly $465B in total resources available.
- We noted earlier this week that Treasury told Congress that it was required to extend its debt issuance suspension period from Jun 27 to Jul 24, in effect prolonging the use of extraordinary measures while we await a resolution to the debt limit impasse, probably through the fiscal legislation currently going through Congress.
- Realistically, fiscal dynamics so far this year point to potential for Treasury to get into September without running out of cash + extraordinary measures. That seems to be the broad market expectation.
US DATA: Cleveland, Dallas Fed PCE Medians Show Progress But Still Above-Target
The Cleveland and Dallas Fed's median PCE metrics showed a notable drop in May. All indices suggest PCE inflation running above 2%, and higher than the actual core and headline PCE measures, but pressures appear to have cooled from a pickup in the early months of the year.
- The Cleveland Fed's median PCE measure came in at 0.22% M/M, a 10-month low after April's 15-month high 0.31%. This left median PCE at 3.01% on a Y/Y basis, down from 3.06% prior for a the joint-lowest (with Feb) since September 2021.
- The Dallas Fed's annualized median rate fell to 2.01%, from 2.65% prior for a 10-month low. The 6-month annualized rate edged lower to 2.74% (2.76% prior), a 4-month low, with the Y/Y rate ticking down to 2.55% from 2.56%, echoing the Cleveland Fed for the lowest reading since September 2021.
USDCAD TECHS: Pivot Resistance Remains Intact
- RES 4: 1.4111 High Apr 4
- RES 3: 1.4016 High May 12 and 13 and a key resistance
- RES 2: 1.3920 High May 21
- RES 1: 1.2710/3803 20- and 50-day EMA values
- PRICE: 1.3658 @ 16:23 BST Jun 27
- SUP 1: 1.3618 Low Jun 26
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
USDCAD has pulled back from its recent highs. The primary downtrend remains intact and short-term gains appear to have been corrective. Key support and the bear trigger has been defined at 1.3540, the Jun 16 low. Clearance of this price point would resume the downtrend. Any reversal higher would instead signal scope for a stronger retracement. Pivot resistance to monitor is at the 50-day EMA, at 1.3803.
