OIL: Mid-Day Oil Summary: Crude Falling
Jan-29 12:47
Oil prices take a sharp pull-back as more bearish fundamentals take hold with U.S. stockpiles expected to rise in the latest weekly report and eased concerns over Libyan supply.
- Brent MAR 25 down 0.5% at 77.12$/bbl
- WTI MAR 25 down 0.5% at 73.43$/bbl
- The USD index is down 0.1% ahead of the Fed decision later today. The Fed is expected to leave rates unchanged today.
- EIA US crude inventories are today expected to show a build of 2mbbl and with a build for gasoline and draw for distillates.
- API weekly oil stock data from late yesterday according to Bloomberg, Crude +2.86mbbl, Cushing -144kbbl, +1.89mbbl, Distillate -3.75mbbl
- ARA crude inventories fell by 5.4mn bbls or 11% in the week ended Jan.24 to 46mn bbls according to Genscape.
- Oil markets are signalling they are tight with low inventories, opening the space for OPEC+ to bring back supply according to Carlyle Groups Jeff Currie speaking on Bloomberg tv.
- Iran’s NIOC has set the OSP for its Iran Light crude for February at a $1.95/bbl premium to the Oman/Dubai crude benchmark, according to Shana.
- Kazakhstan is not planning to adjust its 2025 oil production forecast and will wait for the next OPEC+ meeting, Kazakh Energy Minister Almassadam Satkaliyev said on Wednesday Interfax reports.
- Russia’s largest oil companies may receive government permission to continue gasoline exports until the end of February, allowing them to maintain higher runs Kommersant reports.
- Fire at Sibur-Kstovo refinery in Nizhny Novogorod region has been contained, Interfax reports.
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STIR: Large Jun'25 SOFR Midcurve Option Package
Dec-30 12:31
- Just over 33,000 0QM5 96.37/97.00 call spds vs. 95.37/95.62 put spds ref 96.02 - checking direction.
US TSYS: Tsys Unwinding Friday's Sale, PMI, Pending Home Sales Ahead Year End
Dec-30 11:47
- Treasuries are looking modestly firmer, near early early London session highs as rates recover from Friday's sell-off. The Mar'25 10Y contract trades 108-19 last (+5) vs. 108-21 high on decent volumes heading into year end: just over 175k at the moment.
- Average to small year-end duration extensions: US +0.07Y, EU: +0.04Y, UK -.02Y (Bbg)
- Tsy 10Y yield at 4.5951% (-.0303), curves mixed with 2s10s -.342 at 28.950 despite overnight Block steepener: +4,276 TUH5 at 102-22.75 vs. -2,592 TYH5 108-17.5 (0256:12ET); 5s30s +1.752 at 37.159.
- Projected rate cuts into early 2025 look steady to slightly higher vs. late Friday levels (*) as follows: Jan'25 steady at -2.8bp, Mar'25 -13.6bp (-13.3bp), May'25 -19.5bp (-18.5bp), Jun'25 -28.8bp (-26.5bp).
- Data on tap (prior, estimate): MNI Chicago PMI (40.2, 43.0) at 0945ET, followed by Pending Home Sales at 1000ET MoM (2.0%, 0.8%), YoY (6.6%, 7.9%). Dallas Fed Mfg Activity at 1030ET (-2.7, -3.0). Dearth of scheduled Fed speak until Richmond Fed's Barkin gives keynote remarks at a Maryland Bankers assn event on January 3 at 1100ET (text & Q&A).
- Treasury auctions $84B 13W, $72B 26W bills at 1130ET followed by 75B 42D CMBs at 1300ET.
EUROPEAN INFLATION: Portugal HICP Accelerates, Core CPI Also Higher
Dec-30 11:41
Portugal HICP rose to 3.1% Y/Y in December, its highest since June 2024 and notably above November's 2.7%. The national CPI measure also saw some acceleration, both on headline (3.01% vs 2.47% Nov) as well as on core (2.80% vs 2.61% Nov). Behind the higher CPI headline, Statistics Portugal identifies energy and unprocessed food as the predominant drivers.
- Specifically, energy CPI came in at 4.89% Y/Y (2.14% Nov, mainly driven by base effects as M/M this was +0.43%), while unprocessed food CPI was 3.42% Y/Y (1.95% prior, again partially a base effect as this was +0.50%M/M).
- CPI excl. housing accelerated just over 0.5pp, as headline, indicating that rental inflation saw a similar increase to the wider index (+0.10% M/M).
- For reference, Portugal contributes 2.4% to the overall Eurozone HICP 2024 basket.
- December flash inflation data for Ireland will be released tomorrow, with the other major releases of the December round out next week. Belgium HICP already came in at 4.4% Y/Y, decelerating four tenths vs November, while Spain HICP surprised consensus to the upside earlier today (2.8% Y/Y vs 2.6% cons).
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