AMERICAS OIL: WTI crude reversed lower
August 6 - Americas End-of-Day Oil Summary: WTI crude reversed lower after US Secretary of State Rubio expressed hope following envoy Witkoff’s meeting with Putin. The market had traded higher in volatile trading after an additional 25% tariff was placed on India for its purchases of Russian oil.
- Saudi Arabia raised its September Arab Light OSP to Asia by $1/bbl to +$3.20/bbl, more or less in line with expectations.
- The US issued an additional 25% tariff on India for its purchases of Russian oil. Bloomberg reports that Trump is weighing additional measures targeting Russian oil revenue, such as sanctions on oil tankers and related entities.
- Russia and the US sent ‘signals’ to one another in a Putin-Witkoff meeting today.
- Trump suggested on Tuesday other countries – including China - may face increased tariffs if they continue buying Russian energy.
- Russian product exports declined around 4% in July from June to their lowest in nine months based on Vortexa data compiled by Bloomberg.
- Russia plans to increase exports from its western ports to nearly 2m b/d in August after two refineries cut runs following Ukrainian drone attacks, two industry sources told Reuters.
- Iraq’s oil minister said oil exports through Ceyhan would resume on Wednesday or Thursday. Trade sources told Reuters there are no signs of an imminent resumption.
- Iraq is planning a significant expansion of crude output capacity at its giant Kirkuk oil fields, according to Bloomberg.
- US trade remains in focus with risk of an increase to the 25% tariff on Indian exports to the US. Trump earlier this week said on Truth social that he will “be substantially raising the Tariff paid by India to the USA” due to Indian ‘buying and then selling on Russian oil’.
- MNI Oil Weekly: {https://enews.marketnews.com/ct/x/pjJsdgaNlLoI6axkdxF2GQ~k1zZ8KXr-kA8x67BX5XyptIPjO1OcQ}
- US cracks are up supported by weekly stock draws with gasoline stocks down 1.3mbbl and distillates down 0.57mbbl. Four-week average implied gasoline demand is ~2% below the year-ago while implied distillate demand is almost 4% below a year ago.
- WTI Sep futures were down 1.3% at $64.35
- WTI Oct futures were down 1.3% at $63.39
- RBOB Sep futures were up 0.8% at $2.09
- ULSD Sep futures were up 0.5% at $2.26
- US gasoline crack up 0.8$/bbl at 23.50$/bbl
- US ULSD crack down 1.3$/bbl at 30.59/bbl
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USDJPY TECHS: Trades Through The 50-Day EMA
- RES 4: 148.65 High May 12 and a reversal trigger
- RES 3: 148.03 High Jun 23
- RES 2: 146.19/146.77 High Jun 24 / 76.4% of Jun 23 - Jul1 bear leg
- RES 1: 145.82 High Jul 07
- PRICE: 145.77 @ 15:52 BST Jul 7
- SUP 1: 144.18/142.68 Low Jul 4 / 1
- SUP 2: 142.12 Low May 27 and a key short-term support
- SUP 3: 141.96 76.4% retracement of the Apr 22 - May 12 upleg
- SUP 4: 141.49 Low Apr 23
USDJPY has started the week on a firmer note. Price has breached the 50-day EMA, at 144.91, and a close above it would highlight a stronger reversal. This would expose 146.19, the Jun 24 high. For now, gains still appear corrective. Moving average studies are in a bear-mode position, signalling a dominant downtrend. A resumption of weakness would open 142.12, the May 27 low and a key short-term support.
US STOCKS: Extending Lows Yet Again on More Tariff Tweets
- Stocks extend late session lows after latest tariff announcements via Pres Trump's social media platform: 25% on goods from Malaysia and Kazakhstan, 30% on South Africa, and 40% on Laos.
- Currently, the DJIA trades down 664.11 points (-1.48%) at 44163.91, S&P E-Minis down 76.5 points (-1.21%) at 6247.5, Nasdaq down 265.4 points (-1.3%) at 20335.29.
- Energy, Consumer Discretionary, Materials, Financials and Health Care sectors underperforming.
- Main laggers in the second half include: Tesla -7.01%, First Solar -4.39%, Dow Inc -4.22%, Lululemon Athletica -4.21%, EOG Resources -3.74%, Halliburton -3.62%, Old Dominion Freight Line -3.58% and Albemarle Corp -3.53%.
TARIFFS: Trump: Tariff Rates Of 25% On Malaysia, 30% On South Africa
Trump announces on Truth Social the following tariff rates to be imposed on Aug 1 (in similar letters to those seen sent earlier to Japan and South Korea). White House Press Secretary Leavitt announced earlier that there would be 12 letters sent today - this is 5 of those sent in a quick burst, implying 7 more to be announced later.
- 25% tariffs on Malaysia and Kazakhstan - had been announced at 24% / 27% respectively before tariff "pause"
- 30% on South Africa (USDZAR quickly rises 0.3%) - had been announced at 31% before tariff "pause"
- 40% on Laos and Myanmar - had been announced at 48% / 45% respectively before tariff "pause"
