World of Oil Derivatives Greg Newman

If you would like to access our free comprehensive monthly  oil report as mentioned in the podcast, click here: https://www.onyxhub.co/dashboards/oil-market-report-may/

In last week's podcast, we had started to see pressure in the crude futures contracts, and we've slid to a new low of this cycle today at $82.30/bbl.


Refinery margins were the major reason for bullish Brent over the past few months, however now it’s the major reason market sentiment has flipped. Margins have strengthened slightly week-on-week, but that’s on the basis of weaker crude competing against even weaker products. It’s a self-fulfilling cycle where weaker margins are dampening demand - which reinforces bearish sentiment for structure and spreads.


Our Macro Economic specialist, James Brodie, explains that CPI, PPI, Employment Cost Index and Unit Labour Costs have all come in above expectations, while employment data is suddenly deteriorating. This is the worst case for the Federal Reserve, whose chair Jeremy Powell last week revealed that he thinks it's unlikely the next rate move in the U.S. will be a hike.


The trade idea this week is to sell the European Naphtha crack in the prompt June contract. 


If you would like to connect with any of our hosts on LinkedIn, please click on the hyperlinks below:
Greg Newman: https://www.linkedin.com/in/oilderivatives/
James Brodie: https://www.linkedin.com/in/jamesbrodiecmt/
Martha Dowding: https://www.linkedin.com/in/martha-dowding-ab84801a6/\
Vincent Wu: https://www.linkedin.com/in/vincent-wu-099816125/

Chapters for this episode are: 
0:00 Welcome 
1:29 Brent Futures 
5:42 Macro market news 
13:55 Refinery margins 
20:30 Ones to watch & "Googling oil:" world oil news 
31:58 Trade idea of the week 
37:59 Poll results and outro

Welcome back to the third episode of Macro Mondays with James Brodie - Trends, Risk & Analysis.
On today's show James discusses softening economic data out of the US, where there are murmurs of stagflation, the less hawkish Fed Chairman Powell and the weaker than expected employment data.
He also examines the big movers for this week. USDJPY with 2 rounds of intervention and cocoa has also fallen 41.5% in just 3 days. There's no key economic data in the week ahead so the market will trend off the employment data. Geopolitical tensions also appear to be diminishing so keep an eye on the U.S. 2 year yields, the dollar index , the S&P and gold for key moves. 
If you would like to connect with any of your host, James Brodie. You can follow him X (formally Twitter) @jamesrbrodie Or, follow him on LinkedIn by clicking the link below: James Brodie: https://www.linkedin.com/in/jamesbrodiecmt/

Brent futures opened at $87.50 per barrel, seeing a $1 decrease due to promising ceasefire negotiations, with a Hamas delegate heading to Cairo on Monday. The market is rather sanguine on geopolitical risk, and has been de-risking over the past week, with open interest in ETFs seeing a substantial decline.
 Looking to the refinery margin changes, the prompt European margin increased slightly over the week as stronger products outweighed stronger crude. There was notable strength observed in gasoline, naphtha, and 3.5% barges.
 This week, James focuses on mixed U.S. data, featuring weak GDP headlines but strong inflation components, potentially posing challenges for the Federal Reserve. Powell's press conference at this week's Fed meeting will be closely watched.
 In the "Googling Oil" segment, the prevailing headline revolves around oil pricing falling on Monday, signalling the possibility of Israel and Hamas engaging in ceasefire talks this week.
 Vincent's trade idea this week is to go short on the Q3 EBOB crack. You can find more details here: https://youtu.be/5CEovEVKGhI 
If you would like to connect with any of our hosts on LinkedIn, please click on the hyperlinks below:
Greg Newman: https://www.linkedin.com/in/oilderivatives/
James Brodie: https://www.linkedin.com/in/jamesbrodiecmt/
Martha Dowding: https://www.linkedin.com/in/martha-dowding-ab84801a6/
Vincent Wu: https://www.linkedin.com/in/vincent-wu-099816125/

Chapters for this episode are: 
0:00 Welcome 
1:00 Brent Futures 
7:06 Macro market news 
18:28 Refinery margins 
25:51 "Googling oil:" world oil news 
30:02 One to watch
32:36 Trade idea of the week
36:27 Poll results and outro

Welcome back to the second episode of Macro Mondays with James Brodie - Trends, Risk & Analysis.

On today's show James discusses recent mixed economic data out of the US, OIS pricing and the Yen volatility. He also dives into what's happening with gold, silver, tech and equity markets.
 
Looking at recent employment data, James explains that although employment data is strong, the jobs that are being created are part time jobs and full time jobs are being lost. In fact, 1.34 million fulltime jobs have been lost, which is not a good sign for the economy...
 
If you would like to connect with any of your host, James Brodie. You can follow him X (formally Twitter) @jamesrbrodie Or, follow him on LinkedIn by clicking the link below: James Brodie: https://www.linkedin.com/in/jamesbrodiecmt/

Looking at the past week, the oil market was too long and had to de-risk.

Brent Futures saw a week of stagnation and mean reversion, $90/bbl oil was very short lived and sell-off was driven by speculative positioning cycles as market participants took off length amid a waning geopolitical premium.

Looking to the refinery margin change, Dated Brent was weaker than last week and is now seeing a little bit of support, whilst gasoil continued to weaken. Martha notes the difference between the straight run and more complex products including some interesting moves in VGO prices.

The ones to watch this week are gold and tech stocks. Gold broke higher out of the $2080 resistance level the same week S&P and Nasdaq topped. However tech stock giant, Nvidia was down 21.8% from all-time highs on the week.

The big stories to follow in our "Googling Oil" segment this week are; US reimposing oil sanctions on Venezuela after broken election promises and Louisiana State University allowing Shell to influence studies after a $25m donation.

The Trade Idea for this week is to go long May Gasoline E/W.

Don't forget to check out Macro Mondays with James Brodie here: Macro Mondays with James Brodie
 
If you would like to connect with any of our hosts on LinkedIn, please click on the hyperlinks below:
Greg Newman:  https://www.linkedin.com/in/oilderivatives/
James Brodie:  https://www.linkedin.com/in/jamesbrodiecmt/
Martha Dowding:  https://www.linkedin.com/in/martha-dowding-ab84801a6/
Vincent Wu: https://www.linkedin.com/in/vincent-wu-099816125/

Chapters for this episode are: 
0:00 Welcome 
1:08 Brent Futures
6:25 Refinery margins
11:43 This week in trading 
17:13 Macro market news 
26:29 "Googling oil:" world oil news 
34:36 Trade idea of the week 
39:17 Poll results, gold prices, and outro

Onyx Capital Group is proud to launch a brand new show; Macro Monday's with James Brodie - Trends, Risk & Analysis. 

On today's show James discusses recent strong economic data out of the US, OIS pricing and the US dollar strength. 

He also dives into what's happening with gold, silver and equity markets. It seems like tech stocks are crashing at the moment, with Nvidia -21.8 from ATH and Tesla down 49.4% from its all-time high. 

James walks us through recent US unemployment data and lets us know the risks to watch for the week ahead. 

Tune in to World of Oil Derivatives tomorrow to hear James discuss these trends further. 

If you would like to connect with any of your host, James Brodie. You can follow him X (formally Twitter) @jamesrbrodie

Or, follow him on LinkedIn by clicking the link below: 
James Brodie:  https://www.linkedin.com/in/jamesbrodiecmt/

Chapters for this episode are: 
0:00 Welcome 
1:35 Economic data
6:13 OIS pricing
7:54 US dollar strength
11:50 Equities
14:22 Gold and silver
18:16 Employment data
20:09 The week ahead
22:02 Volatility