OIL PRODUCTS: Tariffs Stem Uncertainty in US Fuel Oil Market: Platts
The US fuel oil market has experienced immediate shifts following the March 4 implementation of President Trump's tariffs on energy imports from Mexico and Canada, Platts said.
- The US imposed a 25% tariff on all imports from Mexico and a 10% tariff on Canadian energy imports. This move is expected to redirect Mexican oil to Europe, benefiting the US market by reducing supply.
- The US Gulf Coast, home to most of the nation's refining capacity, regularly imports Mexican crude and HSFO.
- Market volatility is anticipated due to the new administration's trade policies. Mexican oil's flexibility may offer advantages over Canadian energy, which has fewer export options.
- Market impact has been mixed, with the USGC HSFO swap spread narrowing and the April HSFO swap price dropping to $63.75/b, Platts said.
- The physical USGC HSFO market also saw a decline in barge pricing. Overall, the tariffs have introduced uncertainty and potential shifts in supply dynamics for the US fuel oil market.
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US TSY OPTIONS: Large Short-Term Call Buy, Opener
- +45,600 wk2 TY 112.75 calls, 1 ref 109-01 (expire Friday) - new trade, no open interest on option that expires Friday
EURGBP TECHS: Bear Threat Remains Present
- RES 4: 0.8474 High Jan 20 and a key resistance
- RES 3: 0.8421 High Jan 27
- RES 2: 0.8381 20-day EMA
- RES 1: 0.8363 Intraday high
- PRICE: 0.8297 @ 16:46 GMT Feb 3
- SUP 1: 0.8296 Low Feb 3
- SUP 2: 0.8223 Low Dec 19 and a key support
- SUP 3: 0.8203 Low Mar 7 ‘22 and a lowest point of a multi-year range
- SUP 4: 0.8000 Round number support
EURGBP is trading in a volatile manner. The bear cycle that started Jan 20 remains in play and today’s price activity has strengthened - for now - a bearish threat. A resumption of weakness would pave the way for a move towards the first key support at 0.8223, the Dec 19 low. On the upside, the 20-day EMA is seen as a key short-term resistance - at 0.8381. A breach of the EMA would highlight a bullish development.
US: Republican Confidence In Economy Raises Risk Of Blowback For Trump
A new survey from Gallup has found that, “solid majorities of Republicans [voters] believe all five economic factors will improve over the next six months.”
- Gallup: “This includes three-quarters who say the stock market and economic growth will increase over the next six months and six in 10 who say inflation and interest rates will go down. Nearly as many, 57%, expect unemployment to go down, while 20% believe it will go up.”
- Republican optimism suggests there could be a snapback in approval for President Trump if his actions fail to bolster the economy and deliver on promises to lower interest rates and tackle inflation.
Figure 1: Expectations for Key Economic Factors, by Political Party “Over the next six months, do you think that each of the following will go up a lot, go up a little, remain the same, go down a little (or) go down a lot?”
Source: Gallup
