OIL: Mid-Day Oil Summary: Crude Slightly Higher
Feb-06 12:27
Oil prices have regained some ground today, though remain near their lowest levels this year on the back of increased trade protectionism, which could limit global growth.
- Brent APR 25 up 0.4% at 74.91$/bbl
- WTI MAR 25 up 0.4% at 71.34$/bbl
- 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.
- 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.
- Chinese oil and gas importers are likely to try and seek waivers to try and avoid the latest retaliatory tariffs aimed at U.S. imports from Feb 10 Reuters sources report.
- The WTI crude options skew has turned more bearish this week amid market oversupply risks in 2025 as trade protectionism could limit global growth adding to concern for soft oil demand growth in China.
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PIPELINE: Corporate Issuance Roundup: $6B EIB on Tap
Jan-07 12:23
Hard act to follow after Monday's record $59.55B corporate debt issuance - would have been a record even without $12B Saudi Arabia & $8.5B Mexico multi-tranche issuance. European Investment Bank (EIB) leads so far today with $6B 5Y SOFR:
- Date $MM Issuer (Priced *, Launch #)
- 01/07 $6B European Investment Bank (EIB) 5Y SOFR+42
- 01/07 $500M DBJ WNG 10Y SOFR+73
- 01/07 $Benchmark World Bank 7Y +54
- 01/07 $Benchmark ADB 3Y SOFR+31
- 01/07 $Benchmark CIBC 5Y SOFR+75a
- 01/07 $Benchmark Kommunalbanken 5Y
- 01/07 $Benchmark Ontario 5Y SOFR+60a
- 01/07 $Benchmark Santander 5Y +135a, 10Y +160a
- 01/07 $Benchmark Kexim 3Y +55a, 3Y SOFR, 5Y +75a, 10Y +90a
- 01/07 $Benchmark SMFG 5.25Y +100, 5.25Y SOFR, 7Y +110a, 10Y +120a
OUTLOOK: Price Signal Summary - Bear Cycle In Gilts Remains Intact
Jan-07 12:11
- In the FI space, the trend cycle in Bund futures remains bearish and last Friday’s sell-off plus Monday’s extension, reinforces this theme. Sights are on key support at 132.00, the Nov 6 low. Clearance of this level would strengthen a bearish theme. Initial resistance is seen at 133.48, last Friday’s high. Key short-term resistance is at 134.10, the 20-day EMA.
- The trend condition in Gilt futures is unchanged, it remains bearish and recent short-term gains appear to have been corrective. The recent breach of 91.87, the Dec 19 low, confirmed a resumption of the downtrend. Sights are on 91.58 next, a 4.382 projection of the Dec 3 - 4 - 5 minor price swing. Initial resistance is at 92.08, the Jan 2 high. Resistance at the 20-day EMA, is at 93.16, and the average is seen as an important hurdle for bulls.
EURIBOR OPTIONS: Put spread seller
Jan-07 12:03
ERG5 97.625/97.50ps 1x2, sold at 2.75 in 2.5k.
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