OIL: Crude Little Changed Ahead Of Key Events

Oil prices have continued to move higher during APAC trading today and look set to finish December higher. They were boosted yesterday by forecasts for colder weather in the US and Europe, which also drove natural gas prices higher. Brent is up 0.5% to $74.38/bbl after a high of $74.59 earlier, and WTI is also 0.5% higher at $71.36/bbl after reaching $71.60. The USD index is down around 0.1%.

• Brent is currently up 4% in December, while WTI is 5.5% higher. Both benchmarks are likely to be little changed over the year with Brent currently up 0.3% and WTI +2.6%.
• Oil prices have found support from China’s manufacturing PMI remaining above 50 in December even though it was down 0.2 points and slightly lower than expected. The composite rose to 52.2 from 50.8 driven by non-manufacturing. Oil markets have been concerned about the strength of China’s demand for some time and are watching closely for any impact from policy stimulus.
• The supply outlook remains unclear but a market surplus is expected for 2025. US industry-based inventory data is published later today. There have been crude drawdowns but gasoline stocks have continued to build.
• Germany, Italy, Switzerland, Sweden and Norway have holidays, the UK closes at 12:30 and France at 14:05.
• US October house price data and December Dallas Fed print later. 

Gold is little changed in today’s Asia-Pac session, after closing 0.6% lower at $2606.50 on Monday. 

• Gold is on track for one of its most significant annual gains this century, rising 26% amid a combination of persistent geopolitical risks and a surge in central bank purchases.
• Lower interest rates have also been a key driver, as gold — being a non-yielding asset — becomes more attractive in such an environment.
• While bullion has edged lower since Donald Trump’s decisive victory in November’s US presidential election, its performance in 2024 remains ahead of most other commodities.
• According to MNI’s technicals team, Monday’s move down undermined the recent bullish theme. A resumption of weakness would signal scope for an extension towards the key support at $2536.9, the Nov 14 low. Moving average studies are in a bull mode position.

TYH5 is +0-05 firmer at 109-04 after Monday’s solid gains. 

• There has been no cash dealing in US tsys today with Japan out for a bank holiday. Today’s US data (prior, est) includes FHFA House Price Index MoM (0.7%, 0.4%) and S&P CoreLogic CS 20-City MoM SA (0.18%, 0.20%) at 0900ET, Dallas Fed Services Activity (9.8, --) at 1030ET.
• Reminder for Tuesday's session: Rate futures have a full session (1600ET close) while cash Tsys close at 1400ET.
• While the NYSE Group markets will close on January 9 in observance of the National Day of Mourning for President Carter (New York Stock Exchange, NYSE American Equities, NYSE American Options, NYSE Arca Equities, NYSE Arca Options, NYSE Chicago and NYSE National), the CME Group has opted for early close, link HERE
• FI open outcry will close at 1300ET, and GLOBEX after at 1315ET.
• More to follow, but economic data expected that day is likely to proceed as normal (weekly jobless claims at 0930ET, Wholesale trade & inventories at 1000ET).
• Treasury auctions scheduled for January 9 remain uncertain (4- & 8W bills at 1130ET, 30Y bond re-open at 1300ET).