Flux News

Macro Specialist James Brodie and Research Analyst Harry Nedeljkovic weigh in on the latest news in the presidential campaign, discussing who the Democratic Party will select as a replacement for Joe Biden as their candidate, who will likely be chosen as a running mate, how Donald Trump’s could react, and subsequently how these critical decisions may affect markets.

US June retail sales remain unchanged (0.0% m/m; est. -0.3%) while industrial production is up +0.6% m/m (est. +0.3%). Powell said yesterday “Now that inflation has come down and the labour market has indeed cooled off, we’re going to be looking at both mandates.” Looking at other US data, jobless claims are trending higher.

The Chinese central bank also unexpectedly cut key lending rates to new record lows at the July fixing to aid the country’s fragile economic recovery following weak Q2 GDP readings. In Japan, the yen continued its rally to below 157 per dollar, however, the Nikkei fell 1.16% on Monday morning to 3-week lows.

In the US, the Nasdaq had its worst day since 2022 last week, whilst the S&P 500 has now gone 350 trading days without a 2% correction (the longest since February 2007). According to GS Prime, the hedge fund de-grossing activity over the past 5 sessions is the largest in 20 months and ranks in the 99th percentile over the past 5 years.

Canadian CPI has fallen to 2.7%, with the probability of rate cuts for July 24th having now risen to 90%.

The chart of the week this week is Nvidia, with critical support at 117.80.

Key data releases this week:
Tuesday; GFK Consumer and IFO Business sentiment
Wednesday; Eurozone Manufacturing & Services PMI
Thursday; Q2 advance GDP (2% expected annualised)
Friday; Core PCE (est. +0.1% m/m, 2.4% y/y; prev. 2.6%)

Although the market and the narrative want to be bullish, there's no impetus for it to be there. It's a weak week in Brent futures, after being within in touching distance of $88/bbl. We've seen both long and short prod/merc in Brent 200mb in 2 weeks in Sep 0I. The team explains why bearish economic data from China is adding to the pressure of oil prices. 

Greg, James, Martha and Vincent discuss Iraq, Kazakhstan, and Russia having to submit compensation plans for exceeding quotas in 2024. The OPEC+ Joint Ministerial Monitoring Committee will assess compliance on August 1, and Iraq’s management and its relationship with the KRG are crucial for OPEC+ compliance and global oil stability. While this isn't massive news just yet, there's so much lying beneath the surface of this story, which is leading to people getting nervous on the producer side as a summer rally is yet to come to fruition. 

The sentiment of extra supply is being supported by crude loadings from Guyana, which are planned at 21 million barrels, (or 700,000bb/d) in September, according to programs seen by Bloomberg. This daily volume will be a new record, compared with a revised 613,000 b/d in August. The July volume was also revised higher to 452,000 b/d.

Looking to macro news, there was disappointing data out of China with GDP 4.7% YoY (est 5.1%) retail sales 2.0% (est 3.3%). CPI 0.2% YoY, PPI –0.8%. House prices in China fell 4.5% YoY in June, the most in 9 years. U.S. prices 28bp cuts in September, 67bp cuts by year end. Weak CPI and the Fed is now concentrating on the weaker economy. 

The team discuss Trump's impact on oil and suspect he will want to be bearish and take credit for lowering gasoline prices with a target range of between $60/bbl and $65/bbl, whilst simultaneously putting pressure on the central bank in hopes to restimulate the economy. 

The trade idea for this weak is to buy heating oil. With such a heavy contango in the heating oil spreads it's a good risk reward-trade to buy. We're also seeing strong harvesting in corn and wheat, so if that continues, we'll most likely be seeing some more demand there.

Chapters for this episode are: 
0:00 Welcome 
0:52 Brent Futures, OPEC, and production
12:04 Macro market news 
19:04 "Googling oil:" world oil news 
24:33 Refinery margins 
26:40 Trade idea of the week
30:29 Poll results and outro 

U.S. CPI was lower than expected, (-0.1% MoM, 3.0% YoY), while U.S. PPI came in higher than expected (U.S. June producer prices rise 2.6% Y/Y; EST. +2.3%).

Chinese CPI was on the cusp of deflation again (CPI +0.2% YoY, PPI -0.8% YoY) and Chinese GDP and retail sales were weaker than expected (Q2 GDP 4.7% y/y estimated +5.1%).

James and Harry dive into Chinese New Homes Index data which shows new home prices falling 4.5% YoY in June 2024, the most in 9 years. This data comes despite Beijing attempting to mitigate the impact of a prolonged property downturn and weak economic recovery.

Off the back of Donald Trump’s attempted assassination on the weekend, Harry discusses the impact the event is having and will have on U.S. swing states and why the event caused a Bitcoin rally.
James Brodie’s chart of the week is Gold, which is rallying and approaching $2,430.

The key data releases this week are:
Monday 15 July – Fed Chair Powell to speak
Tuesday 16 July – U.S. June retail sales
Thursday 18 July – Philly Fed manufacturing data

Brent futures climbed towards $88 before settling around $85.50. Money managers increased their long positions in Brent for the third consecutive week, indicating bullish sentiment

European M1 refinery margins softened in the week but remained profitable at $6.40/bbl. Products saw weakness across the barrel but the upcoming hurricane season and potential disruption to US infrastructure raise questions about short-term price movements.

Dreadful US data, including a contraction in manufacturing and services PMI, raises recession fears. The upcoming Fed rate cuts, if implemented in September, may have little impact until 2025.

The team also discusses Hurricane Beryl's impact on US energy infrastructure and challenges facing the biofuels industry with stalling growth and collapsing profitability.

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: 
0.42 - Brent Futures Flat Price
4.14 - Macro Economic News
7.35 - Refinery Margin change
14.45 - One to watch
28.29 - Googling Oil
35.21 - Trade Idea
39.41 - Poll 

Today, macro specialist James Brodie and research analyst Harry Nedeljkovic discuss Sunday’s French legislative election second round and Thursday’s UK General Election followed by their respective impacts on global markets and geopolitics.

James and Harry also cover US ISM manufacturing and services PMI data for June, FOMC minutes, German and French industrial production, and perhaps most significantly, US non-farm payrolls and unemployment data.

The key data to look out for this week is:

Tuesday 09 July: Fed Chair Powell testifies

Wednesday 10 July: OPEC monthly report, China CPI & PPI

Thursday 11 July: US CPI, UK GDP & industrial production

Friday 12 July: US PPI, Uni Michigan consumer sentiment

If you would like to connect with our hosts on LinkedIn, you can do so by clicking on the link below: James Brodie; https://www.linkedin.com/in/jamesbrodiecmt/ Harry Nedeljkovic; https://www.linkedin.com/in/harrynedeljkovic/

#macroeconomics #economics #stocks #stockmarket #oott #oil #oilandgas #markets #crude #marketupdate #investing #finance #podcast #trading #energy #inflation #employment #opec #oilswaps #election #UKelection #Labour #Conservatives #FrenchElection #Macron #LePen 

Brent crude prices have had a strong week, continuing to rally at $87/bbl. The latest CFTC data indicates that the market has become balanced and neutral in positioning. This presents an opportunity for bullish investors to take action, with legacy positions and new entrants supporting this trend.

However, macroeconomic news doesn't fully support this bullish outlook. Economic data from China and the US is weak, with China's manufacturing sector contracting for the second consecutive month and service activity dropping to a five-month low. Additionally, central banks intervening in the bond market as yields hit all-time lows signal potential global economic challenges.

Regarding refinery margins, Martha raises a question: how far into the summer driving season must we go before the market reacts? Currently, refinery margins have increased by about a dollar, with crude and product prices also rising.

Gasoline prices remain unstable and sideways, suggesting the potential for shocks given the unusually low-price levels and poor liquidity. This instability might lead to gappy price action. Last week, RBOB saw the highest level of short positions by money managers in five years.

The team also discusses the big story of the week: Senate Budget Committee Chairman Sheldon Whitehouse (D-RI) has initiated an investigation, demanding answers from the CEOs of 18 oil producers regarding potential collusion with OPEC to artificially raise prices for American consumers and increase federal government costs.

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

0:28 Brent Futures 

1:50 Macro market news

6:21 Refinery margins & products

15:14 China & US economic data

19:24 "Googling oil:" world oil news 

23:22 Poll results

26:08 Global elections & the markets

29:20 Outro

Today, Macro specialist James Brodie and Research Analyst Harry Nedeljkovic discuss the impact of the first round of results of the French election, along with the upcoming UK and US elections and their economic impacts.

James and Harry also cover the Japanese Yen, European inflation, and Guyana's economic growth due to Exxon and partners' investment to develop Starbroek oil and gas field. Finally, they cover Ferrari's growing stock and Volkswagon's $5 billion investment in Rivian.

The key data to look out for this week is:
Tuesday - Eurozone CPI June preliminary
Wednesday - US ISM Services for June, FOMC Minutes
Friday - Industrial Production FOR (France, Germany, Spain), US Non-Farm Payrolls

If you would like to connect with our hosts on LinkedIn, you can do so by clicking on the link below:
James Brodie; https://www.linkedin.com/in/jamesbrodiecmt/
Harry Nedeljkovic; https://www.linkedin.com/in/harrynedeljkovic/

#macroeconomics #economics #stocks #stockmarket #oott #oil #oilandgas #markets #crude #marketupdate #investing #finance #podcast #trading #energy #inflation #employment #opec #oilswaps #election #USelection #Trump #Biden #Debate #FrenchElection #Macron #LePen #Ferrari #Rivian

For a special podcast episode, Group Chief Executive Greg Newman is joined by Senior Commercial Associate Remona Tefaj and Business Development Associate Melis Varol for a discussion regarding CFTC COT reports and the significance of third party data sets.

Greg, Remona, and Melis delve into the scope of the information provided by the CFTC, how using supplemental third-party data can provide an expansive interpretation of current trader positioning for the whole oil market, and the sales team's rebuttals in their journey of introducing Onyx's data set.

You can find the whitepaper here: https://www.onyxhub.co/news/all/free-cftc-cot-white-paper/

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/
Remona Tefaj: https://www.linkedin.com/in/remona-tefaj-a585b9125/
Melis Varol: https://www.linkedin.com/in/melis-varol-82a586172/

Group Chief Investment Officer and Onyx Co-Founder Omar Kayaam joins Group Chief Executive Officer Greg Newman to reflect on how they've scaled the business over the last year.

They discuss the big moves that have propelled the business, including hiring experts, developing the technology arm of Onyx, buying out investors, expanding to new offices, and more. Eight years after founding the company, Omar and Greg address how they finally found the right team to navigate the evolving industry and carve a path to a democratised oil market.

Tune in to hear their insights and their vision for the future of Onyx.

If you'd like to connect with Greg or Omar on LinkedIn, click on the links below: 

Greg Newman: https://www.linkedin.com/in/oilderivatives/
Omar Kayaam: https://www.linkedin.com/in/omar-naveed-kayaam/

You can find Greg and Omar's podcast from 2023 here: https://youtu.be/3iF48lAxZqI

Chapters for this episode are:
0:00 Intro
1:14 Major Changes & Milestones Overview
3:12 Share Buyback, New board & Staff, C-Suite
11:15 Office Expansion
15:13 Evolving as the Market Shifts
22:38 Sustainable Business models
32:22 Rising Oil Volumes, Onyx Retail and Investor Offers
36:05 Company Cash Flows, Investments, Managing Risks
38:08 Future Direction & Business Ventures
41:47 Closing Thoughts, Future Recruitment Plans and Outro

We saw extremely rangebound prices in crude this week, with the September Brent futures contract hovering between $84/bbl and $85/bbl.

The team discuss the nature of the oil market, what's going on with Dated Brent, volatility, US jet fuel demand, and the upcoming US election debate. Not to mention, Jorge "The Regulator" weighs in on the current state of benchmarks and conspiracy theories.

Refinery margins have been relatively rangebound, although a weakened crude flat price supported margins this past week. In contrast to previous weeks' performances, the distillates market was lacklustre. Meanwhile, gasoline saw better support on stronger demand indicators. Although refinery margins were not the driver for the recent strength in Dated Brent, this may have spurred some refiners who were originally waiting for lower prices to now make last-minute cargo purchases.

We discuss these trade ideas in detail in our weekly Onyx Alpha report. For further information on where you can access this report, kindly contact our sales team: [email protected]

You can find Onyx's benchmark publication, "The Officials," here: https://www.onyxhub.co/

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/
Jorge Montepeque: https://www.linkedin.com/in/jorge-montepeque-38410bb6/
Martha Dowding: https://www.linkedin.com/in/martha-dowding-ab84801a6/\
Vincent Wu:  https://www.linkedin.com/in/vincent-wu-099816125/

Onyx Hub: https://www.onyxhub.co/ 
OnyxHub is the leading portal for commodity market news with a focus on the oil complex. Discover our charts, forecasts, analysis and more.

Chapters for this episode are:
0:00 Welcome
1:07 Brent Futures 
2:19 Brent, fundamentals, and benchmarks 
15:06 Refinery margins
19:15 "Googling oil:" world oil news 
22:42 Trade idea of the week 
24:41 Poll results and outro