OIL: Oil End of Day Summary: Crude Rises on New US Sanctions
Mar-20 18:28
Crude markets have firmed after the US sanctioned a Chinese independent refinery for the first time, alongside further tankers carrying Iranian crude. Uncertainty around any ceasefire arrangement in Ukraine added support, along with heightened geopolitical tensions in the Middle East.
- WTI APR 25 up 1.6% at 68.25$/bbl
- US sanctions today are the first instance of a China teapot refinery being added, the main outlet for Iranian oil. A further 8 Iranian vessels were also added to the Washington OFAC list today.
- OPEC has released its updated compensation plan for members who overproduced relative to their quotas.
- Ukrainian President Zelenskiy said a halt to strikes on energy facilities in the war with Russia could come quickly. The market is focused on potential progress toward a ceasefire that could lead to the easing of sanctions and increased Russian oil output.
- US Energy Secretary Chris Wright said on March 19 that “now is an attractive time to be buying oil” as the administration seeks to refill the US Strategic Petroleum Reserve, Bloomberg reports.
- Nigeria’s Trans-Niger pipeline has resumed pumping following a blast earlier this week.
- The Trump administration is poised to extend Chevron’s deadline to halt its Venezuela operation for at least another 30 days, following lobbying efforts by the company, Bloomberg reports.
- Brent forecast to average $80/bbl from Q2 2025 through to Q2 2026, according to a UBS note on March 20, cited by Bloomberg.
- Citi Research expects crude oil prices to fall to $60-65/bbl during 2H 2025 (-15-20%)in its base case scenario.
- OPEC has released its updated compensation plan for members who overproduced relative to their quotas.
- Crude output in Guyana rose to 648,000 b/d in February from 620,000 b/d in January, the natural resources ministry said on Thursday.
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US DATA: Dallas Fed Survey Finds Strong Increases In Loan Demand
Feb-18 18:24
- The timely Dallas Fed’s banking conditions survey, collected Feb 4-12, noted that “loan volume continued increasing at a rapid pace in February while loan demand accelerated further.”
- Whilst only a snapshot for one region, it's nevertheless of note with some disagreement on the FOMC as to the level of restrictiveness currently exerted by monetary policy.
- The current period loan demand balance of +30 is up from +11 in the late Dec survey for its highest since May 2022, whilst future loan demand only dipped 3pts to a still elevated +16.
- A net share continue to see tighter credit standards, but with a balance of -10.4 (after -12.5 in late Dec), it poked below the -10.5 in Oct for technically its least since Apr 2022.
- The press release notes that “Loan nonperformance rose across all loan types, while growth in general business activity slowed”. However, we note that the current period NPL ratio at +16 is within recent ranges, which included the Jan 2025 high of +25. What’s more, the balance expecting higher NPLs in the future at +14 was up from two particularly low reports at 4-5 but is stil far lower than the +50 balances seen in 2023.
FED: US TSY 52W BILL AUCTION: HIGH 4.050%(ALLOT 6.53%)
Feb-18 18:02
- US TSY 52W BILL AUCTION: HIGH 4.050%(ALLOT 6.53%)
- US TSY 52W BILL AUCTION: DEALERS TAKE 31.76% OF COMPETITIVES
- US TSY 52W BILL AUCTION: DIRECTS TAKE 1.68% OF COMPETITIVES
- US TSY 52W BILL AUCTION: INDIRECTS TAKE 66.56% OF COMPETITIVES
- US TSY 52W AUCTION: BID/CVR 3.03
EURUSD TECHS: Bull Theme Remains In Play
Feb-18 18:00
- RES 4: 1.0630 High Dec 6
- RES 3: 1.0594 Dec 9 ‘24
- RES 2: 1.0533 High Jan 27 and a reversal trigger
- RES 1: 1.0514 High Feb 14
- PRICE: 1.0467 @ 16:07 GMT Feb 18
- SUP 1: 1.0402 20-day EMA
- SUP 2: 1.0280/0141 Low Feb 10 / 3 and the bear trigger
- SUP 3: 1.0138 1.764 proj of the Sep 25 - Oct 23 - Nov 5 price swing
- SUP 4: 1.0031 2.00 proj of the Sep 25 - Oct 23 - Nov 5 price swing
A bull cycle in EURUSD remains intact and the pair is trading closer to its recent highs. Last week’s gains have reinforced current conditions and strengthened a short-term reversal signal on Feb 3 - a hammer. This suggests scope for an extension near-term. The pair has breached the 50-day EMA, at 1.0432, and sights are on 1.0533, the Jan 27 high. Initial firm support lies at 1.0280, the Feb 10 low.
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