OIL: Crude Futures Steady but Time Spreads Drift Amid Global Growth Concern
Oil prices are holding just above the lowest since the start of the year as the market weighs the implications of U.S.-China trade tariffs as trade protectionism could limit global growth. The prospect of US tariffs has increased oil flows from Canada, which has boosted US inventories.
- The Brent time spreads have narrowed to the lowest since early Jan suggesting an easing of tight supply concern with a surplus possible in 2025 amid low global demand growth. Supply risks from sanctions on Russia and further sanctions on Iran had driven spreads higher in mid-January.
- Saudi Aramco sharply raised March oil prices to Asia for March in response to improving refinery margins and surging premiums of Middle East crude. Aramco raised the price of its Arab Light oil to Asia for March by $2.40/bbl to $3.9/bbl, the largest increase since August 2022.
- EIA yesterday showed US crude inventories rose more than expected by 8.66mbbl with a rebound in crude production and refinery utilization following the winter storm disruption.
- Donald Trump could ultimately prove to be a bearish influence on oil market, Citigroup said, with a forecast of $60-65/bbl through H2 2025.
- Cracks spread are steady today after diesel drifted lower yesterday despite a draw in US stocks and another increase in implied demand under pressure from the rising global trade friction.
- Brent APR 25 up 0.2% at 74.75$/bbl
- WTI MAR 25 up 0.3% at 71.24$/bbl
- Brent APR 25-MAY 25 down 0.03$/bbl at 0.49$/bbl
- Brent JUN 25-DEC 25 down 0.09$/bbl at 2.47$/bbl
- US gasoline crack up 0.1$/bbl at 15.1$/bbl
- US ULSD crack down 0$/bbl at 29.02$/bbl
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STIR: 100bp OF ECB Cuts Priced Through '25 Ahead OF EZ Inflation Data
EUR STIRs little changed vs. settlement levels.
- ECB-dated OIS showing ~24bp of cuts for this month and ~100bp through year-end, with the latter 15-20bp less dovish than levels seen ahead of the Christmas break.
- Euribor futures +1.0 to -0.5.
- Flash national (headlined by France & Italy) & Eurozone CPI data dominates the European schedule this morning.
- Headline Y/Y Eurozone CPI is expected to tick up to +2.4% from +2.2%, while the core Y/Y rate is seen steady at +2.7%.
- Yesterday’s German CPI data presents upside risks to the release, with the move higher in German services inflation particularly noteworthy.
- The results from the ECB’s latest inflation expectations survey are also due to cross.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Jan-25 | 2.675 | -24.2 |
Mar-25 | 2.404 | -51.3 |
Apr-25 | 2.218 | -69.9 |
Jun-25 | 2.081 | -83.6 |
Jul-25 | 2.032 | -88.5 |
Sep-25 | 1.965 | -95.3 |
Oct-25 | 1.933 | -98.4 |
Dec-25 | 1.916 | -100.1 |
GOLD TECHS: Support Remains Exposed
- RES 4: $2762.3 - High Nov 1
- RES 3: $2730.4 - 76.4% retracement of the Oct 31 - Nov 14 bear leg
- RES 2: $2726.2 - High Dec 12
- RES 1: $2665.3/2692.8 - High Jan 3 / High Dec 13
- PRICE: $2641.3 @ 07:30 GMT Jan 7
- SUP 1: $2596.2/2583.6 - Low Dec 30 / 19
- SUP 2: $2564.4 - Low Nov 18
- SUP 3: $2536.9 - Low Nov 14 and a key support
- SUP 4: $2511.1 - Low Sep 12
Gold is unchanged. A bear threat remains present despite the latest recovery. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low. The first firm support to watch is $2583.6, the Dec 19 low. On the upside, a resumption of gains would instead signal scope for a climb towards resistance at $2726.2, the Dec 12 high.
MNI: SWISS DEC CPI -0.1% M/M, +0.6% Y/Y
- MNI: SWISS DEC CPI -0.1% M/M, +0.6% Y/Y
