AMERICAS OIL: WTI Down 3% on the Week
Jan-31 19:45
January 31 - Americas End-of-Day Oil Summary: WTI Down 3% on the Week Amid Intraday Confusion Over Implementation of Tariffs
- WTI ended lower after reversing earlier gains as the White House press secretary refuted a previous Reuters article which suggested tariffs on Mexico and Canada could be postponed until March. Caroline Leavitt said the 25% tariffs on Mexico and Canada would take effect Saturday as planned.
- Earlier confusion stemmed from a Reuters story that suggested the two countries might get a one-month cooling off period with the possibility that oil could be exempted. Canadian crude pared gains on the tariff news; WCS for Mar delivery traded $13.85 below WTI.
- Baker Hughes reported its weekly rig count was up 6 at 582, the first gain in 8 weeks. Oil rigs were up 7 at 479, which was down 20 rigs or 4.0% on the year. Gas rigs were down 1 at 98, which was down 23 rigs or 19.0% on the year.
- The NOAA 6–14-day outlook is predominantly bearish for heating demand, with above-normal temperatures expected from the Southeast to the Southwest while the Upper Northwest and northern New England are below normal. Thus, only parts of PADDs 1 and 5 are likely to see elevated heating demand.
- Gasoline cracks were down slightly but were on track for gains of around 8.6% on the week. US gasoline stocks rose to the highest since Feb 2024 amid higher imports and lower exports, but gasoline demand was 1.8% above the 4-week average. The ULSD crack was only slightly weaker with the weather forecast mostly bearish but with distillate demand 4.5% above the 4-week average.
- WTI Mar futures were down 0.3% at $72.53
- WTI Apr futures were down 0.3% at $71.94
- RBOB Feb futures were down 0.0% at $2.04
- ULSD Feb futures were up 0.4% at $2.48
- US gasoline crack down 0.3$/bbl at 13.90$/bbl
- US ULSD crack down 0.1$/bbl at 28.14$/bbl
- LyondellBasell shut a crude and coker unit at its 290kb/d Houston refinery as the scheduled 1Q shutdown continues. They see 1Q utilization at 35% due to the unit’s shutdown.
- Chevron is seeking to protect a special US license allowing it to operate in Venezuela, arguing China and Russia would gain influence there if they are forced out by the Trump administration.
- The Houston Ship Channel reopened for traffic as fog cleared according to Moran shipping.
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US TSYS: Tsy Curves Look To Finish 2024 at June'22 Highs
Dec-31 19:18
- Treasuries look to finish the last trading session of 2024 lower after reversing Tuesday morning support. Markets closed Wednesday for New Years day, resume full trade Thursday.
- The Mar'25 10Y contract trades 108-25.5 (-5.5) late in the day, 10Y yield near session high of 4.5871%. Curves bounced off flatter levels, 2s10s climbing to 34.344 -- the highest level since June 2022.
- Short end support, in turn, helped projected rate cuts into early 2025 gain momentum vs. late Monday levels (*) as follows: Jan'25 steady at -2.8bp, Mar'25 -14.6bp (-13.6bp), May'25 -20.6bp (-19.5bp), Jun'25 -29.8bp (-28.8bp).
- No substantive reaction to this morning's housing and regional Dallas Fed services activity data. Looking ahead to Thursday data (prior, est): Initial Jobless (219k, 221k) and Continuing Claims (1.910M, 1.890M) at 0830ET; S&P Global US Manufacturing PMI (48.3, 48.3) at 0945ET; Construction Spending MoM (0.4%, 0.3%) at 1000ET.
- Treasury supply: $85B 4- & $80B 8W bill auctions at 1130ET, $64B 17W bill auction at 1300ET.
COMMODITIES: WTI Futures, Gold Holding Higher
Dec-31 18:47
WTI futures are trading higher today as the contract extends recent gains. A stronger reversal to the upside would refocus attention on key short-term resistance at $76.41, the Oct 8 high. Initial firm resistance is unchanged at $71.97. A bear threat in Gold remains present. The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low.
- WTI Crude up $0.9 or +1.27% at $71.88
- Natural Gas down $0.32 or -8.13% at $3.618
- Gold spot up $19.24 or +0.74% at $2625.86
- Copper down $6.95 or -1.7% at $402.3
- Silver down $0.1 or -0.34% at $28.8383
- Platinum up $3.96 or +0.44% at $908.02
US STOCKS: Late Equity Roundup: Tech & Interactive Media Sectors Underperforming
Dec-31 18:36
- Stocks are trading near session lows after reversing early session gains. Though off this year's record highs (SPX Eminis 6178.75, DJIA 45,073.63, Nasdaq 20,204.58) major averages will finish the year with double digit gains: SPX Eminis +19.5%, DJIA +13.1%, while the Nasdaq gained 29.9%!
- Currently, the DJIA trades down 92.19 points (-0.22%) at 42474.46, S&P E-Minis down 28 points (-0.47%) at 5929.75, Nasdaq down 147 points (-0.8%) at 19337.13.
- Information Technology and Communication Services shares underperformed continued to underperform late Tuesday, shares of software and semiconductor makers weighing on the tech sector: Nvidia -1.61%, Advanced Micro Devices -1.36%, Crowdstrike Holdings -1.28%.
- Interactive media and entertainment shares weighed on the Communication Services sector: Alphabet -0.9%, Live Nation -0.76%, Netflix -0.60%, Meta -0.41%.
- On the positive side, Energy and Materials sectors outperformed in the second half, oil & gas stocks buoyed the Energy sector as crude prices continued to rise (WTI +1.0 at 71.99): APA Corp +3.59%, Marathon Petroleum +2.46%, Occidental Petroleum +2.15%.
- Meanwhile, shares of chemical & fertilizer makers supported the Materials sector: Mosaic +2.44%, Celanese +1.42%, Dow +1.37%.
- Looking ahead, the next round of quarterly earnings kicks off mid-January with Blackrock, Bank of NY Melon, Wells Fargo, JP Morgan, Goldman Sachs, Citigroup, US Bancorp, M&T Bank and PNC all reporting between January 13-16.
