
Trader Meeting Notes: A whole lot of nothing
It is hard to keep Brent away from the $60s, with price action slipping from $71.55/bbl at the start of the week to $68.90/bbl at the time of writing on 17 Jul. Nevertheless, NWE and Asian refinery margins remain supported, bolstered by robust gasoil cracks, despite larger-than-expected EIA-reported gasoline and distillate fuel oil builds. Onyx’s CFTC predicting model anticipates producers/merchants to add to their ICE LS gasoil and RBOB shorts in the week ending 15 Jul, which, if true, should signal rising refiner hedging at these levels. On the macro side, nobody seems to be reacting too much to trade tensions, although the EU has prepared a list of potential retaliatory tariffs in case trade talks with Washington break down. Meanwhile, Washington has also threatened sanctions on buyers of Russian exports should the Kremlin fail to secure a ceasefire deal with Ukraine – a decision that does not seem to faze India’s energy minister Hardeep Singh Puri, who remains confident India can meet its oil needs from alternative sources. Also in Washington, President Donald Trump has been desperately trying to steer his loyalists’ attention away from Jeffrey Epstein and onto more important matters, such as coercing Coca-Cola to switch from high fructose corn syrup to cane sugar. President Trump also reportedly showed off a draft of a letter firing Federal Reserve Chair Jerome Powell on 15 Jul, although he has since flipped to saying that he is “not planning” to fire Powell. While the DXY seems to have recovered from an intraday low of 97.714, Mr. Powell’s confidence likely has not.