Bearish API Crushes Cracks While Crude Oil Holds Due To Weaker US Dollar

Bearish set of data from APIs, looking at a 3.6mio bbl build in gasoline and a 2.4mio bbl build in distillates, coupled with lower implied demand for gasoline. Little wonder gasoline cracks continue to take a bath today. Perhaps a major correction is now underway for Gasoline, as rising prices over the past few months start to eat into its own demand. Whether this translate into this pm’s data or not remains to be seen but risk assets shall not be touched either way before the FOMC today. Middle distillate cracks are also under a little pressure, understandably given the API stats and also crude oil’s late evening rally due to USD weakness. SFOT remains short these.

Flat price is a funny game. The only reason why WTI contract is still hovering here is because of the bid in eur/usd and cable, supposedly from middle eastern bidders. Equities had an edgy day yesterday, and shall have another one before the Fed gives their verdict today. This morning’s ECB tender was a staggering 442bio alloted at 1%. They are flushing the mkt with long term liquidity, and SFOT is afraid this may be a weapon of choice for specs to re enter the reflation trade shortly. We shall see the FOMC’s statement this evening and SFOT will position himself only post the meeting, keeping risks low.

Japanese trade data overnight continues to prove ugly, with exports down more than forecast @ -40.9% YoY. China’s role to save the world isn’t working much, innit?

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