OIL: Mid-Day Oil Summary: Crude Rises
Feb-27 12:19
Crude is higher today after news that Trump would revoke Chevron’s license to produce oil in Venezuela, while EIA data showed an unexpected decline in crude stockpiles yesterday.
- WTI APR 25 up 1.2% at 69.44$/bbl
- Brent APR 25 up 1.2% at 73.42$/bbl
- President Trump said on Wednesday that he was revoking a license allowing Chevron to produce oil in Venezuela. Chevron exports about 240k b/d of crude from its Venezuela operations.
- The supply outlook also faces uncertainty from the impact of US policy on Iran sanctions and Ukraine peace negotiations and a potential resumption of Kurdistan exports. Ukrainian President Zelensky is scheduled to meet Trump on Friday. Recent bearish pressure has raised market expectation that OPEC+ might again delay a planned output increase in April.
- Markets remain concerned for the future demand outlook driven by US trade policies amid uncertainty over the strength of China’s economy and after weak US consumer confidence.
- US President Trump said that tariffs on imports from Canada and Mexico will still go ahead, though also hinted that they may be postponed once again. He also attacked European trade practices and has threatened 25% tariffs on imports from the EU. Deadlines have changed and it remains unclear when they will be imposed with the details also uncertain.
- US crude inventories yesterday fell by 2.33mbbl against expectation for a build driven by an unexpected rise in refinery runs.
- Singapore total oil inventories fell by 1.56mbbl in the week to Feb. 26 to 43.73mbbl, according to Enterprise data.
- Asia’s crude oil imports are off to a weak start in 2025, as China continues to buy less and sanctions slow cargoes from Russia, Reuters reports.
- Pemex crude exports fell 44% y/y in Jan. to 532k b/d, the lowest level since Jan. 1990, Reuters reports.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
UK: PM Claims Economy 'Turning Around' Ahead Of Chancellor's High-Profile Speech
Jan-28 12:16
Speaking to Bloomberg TV, PM Sir Keir Starmer has claimed that the British economy is showing signs of a positive turn-around. Starmer's comments come a day ahead of a major speech from Chancellor of the Exchequer Rachel Reeves, who is expected to back major planning reforms and infrastructure projects as part of the gov'ts 'strategy for growth'.
- Earlier Starmer claimed “We have to get our economy working. I think we’re beginning to see how that’s turning around,” saying that his gov't would “strip away regulation, strip away the inhibition of planning and use AI to take us forward". Weak economic expansion and declining business confidence have dealt a blow to the Starmer gov'ts claims that "The number one priority of this Labour government is growth: growth, growth, growth.”
- Seemingly still no set time for Reeves' address to be delivered in Oxford, with The Telegraph reporting a window for the address as "Wednesday morning."
- The most eye-catching headlines from Reeves' speech could centre on the gov'ts support for the expansion of three major London-adjacent airports: Heathrow, Gatwick and Luton. This change in stance - Starmer previously opposed a third runway for Heathrow - could risk rifts in Cabinet with Energy Secretary Ed Miliband seen as a staunch opponent of expanding airports.
- Public trust in Labour's ability to manage the economy continues to slide, with the latest poll from Ipsos showing 27% of respondents choosing the party as their most trusted. While this is still ahead of the main opposition centre-right Conservatives on 21%, the gap between the two is the narrowest since late 2022.
Chart 1. Opinion Poll 'Party most trusted to manage Britain's economy', %
Source: Ipsos, Daily Telegraph
SONIA: Calendar call spread trades for more
Jan-28 12:10
SFIJ5/M5 95.95/96.05cs calendar spread, bought the June for 1 in 8k total.
OUTLOOK: Price Signal Summary - Corrective Cycle In WTI Remains In Play
Jan-28 12:05
- On the commodity front, despite yesterday’s pullback in Gold, the yellow metal is trading closer to its recent highs. A bull cycle is in play and the breach of resistance at 2726.2, the Dec 12 high, reinforces current conditions. Sights are on $2790.1, the Oct 31 all-time high. A break of this hurdle would confirm a resumption of the primary uptrend. The first key support to watch is $2671.6, the 50-day EMA. A reversal lower and a breach of this average would reinstate a bearish threat. The 20-day EMA is at $2702.2.
- In the oil space, Monday’s move lower in WTI futures marks an extension of the current corrective cycle. The 20-day EMA has been breached and attention turns to support around the 50-day EMA, at $72.16. A clear break of the 50-day average would suggest scope for a deeper retracement. On the upside, a reversal higher would focus attention on $79.48, the Apr 12 ‘24 high and a key resistance.
