OIL PRODUCTS: Mid-Day Oil Products Summary: Cracks Diverge On Day    

Feb-13 12:19

US diesel cracks have continued to lose ground today, with EIA data showing an unexpected build in distillates and a large drop in implied demand. Gasoline cracks are rising following an unexpected decline in stocks in yesterday’s data. 

  • US ULSD crack down 0.4$/bbl at 31.07$/bbl
  • US gasoline crack up 0.4$/bbl at 16.46$/bbl
  • US 321 crack up 0.1$/bbl at 21.33$/bbl
  • EIA Weekly US Petroleum Summary - w/w change week ending Feb 07: Gasoline stocks -3,035 vs Exp +545, Implied mogas demand +248, Distillate stocks +135 vs Exp -1,478, Implied dist demand -914
  • The PBF Energy 156k b/d Martinez refinery near San Francisco may need 45 days or more to assess the damage from a fire on Feb. 1, according to Bloomberg sources.
  • Singapore's onshore fuel oil stockpiles rose for the second week, hitting a three-week high above 20 million barrels according to Enterprise data.
  • China’s refined oil exports stood at 2.46m mt in January, down 17.45% on the same period in 2024, according to OilChem citing shipping fixtures.
  • The Dangote refinery’s utilisation rate should reach 65% by Q4, with Euro VI-grade gasoline production commencing in Q2, Kpler said.
  • Port of Fujairah oil product stocks climbed 10% in the week ended Feb 10 according to FOIZ data.

Historical bullets

CROSS ASSET: Broader demand for the Dollar as US Yields edge higher

Jan-14 12:15
  • USDJPY breaks through its intraday high, as just pointed taking its cue from the push lower in US Treasuries, US 10yr Yield is close to test the 4.80% level that held Yesterday.
  • There isn't much in terms of resistance in the USDJPY at current prices, and we are seeing instead 158.87 High Jan 10  next.
  • GBP, CAD, NOK, AUD are all testing their session lows, with broader offers also emerging against the NOK, CNH, NZD, CZK, and CHF.

US: Hegseth Is First Trump Cabinet Nominee To Face Senate Scrutiny

Jan-14 12:05

Defense Secretary nominee, Pete Hegseth, will become the first of US President-elect Donald Trump’s Cabinet nominations to face Senate scrutiny when he appears before the Senate Armed Services Committee at 09:30 ET 14:30 GMT. LIVESTREAM

  • Hegseth will receive a grilling from Democrats over personal misconduct allegations and a lack of managerial experience. Today's hearing will set the tone for upcoming hearings with other embattled nominees - Robert F. Kennedy Jr. (Health Secretary), Kash Patel (FBI Director), and Tulsi Gabbard (Director of National Intelligence) -  who are yet to have hearings scheduled.
  • Key panel Democrat Senator Mark Kelly (D-AZ) said: “I'm interested in hearing about how [Hegseth's] experience has prepared him for the job of managing 3 million people and an $850 billion a year budget,”
  • According to prepared remarks, Hegseth will argue that US national security will be bolstered by “someone with dust on his boots [at] the helm” of the Department of Defense, pledging to give "new defense companies" a better chance to win contracts, and rapidly deploy emerging technologies.
  • If the Armed Services Committee votes to discharge Hegseth’s nomination to the full Senate, he can drop three Republican votes and remain on track for confirmation without requiring Democrat support.
  • Data from Polymarket shows Hegseth has weathered an initial wave of opposition, with an implied probability of 85% of Senate confirmation.

Figure 1: Trump’s Defense Secretary, % Implied Probability of Confirmation 

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Source: Polymarket

US TSY FUTURES: New lows for Tnotes, Yield levels are in Focus

Jan-14 11:59
  • US Tnotes found some support at the 4.80% Mark Yesterday, and while the street wait on the US CPI Tomorrow, PPI Today, some desks will again be watching the 4.80% level, tested a 4.8026% high and a 107.06 low in TYH5.

Looking further out and in case of upside traction in Yield, most Investors will be eyeing the big 5% level:

  • 4.8500% = 106.30.
  • 4.9000% = 106.20.
  • 4.9500% = 106.10.
  • 5.0000% = 106.00+.
  • 5.0187% = 105.28+ (2023 high and highest since July 07).

(Chart source: MNI/Bloomberg):

USGG10YR Index (US Generic Govt  2025-01-14 11-48-13