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U.S. equity index futures slightly green: Nasdaq 100 up
~0.3%
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U.S. Q4 employment costs vs 1% vs 1.1% estimate
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Euro STOXX 600 index off ~0.4%
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Dollar ~flat; gold, crude down; bitcoin rallies
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U.S. 10-Year Treasury yield falls to ~3.49%
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CRUDE OIL FUTURES: IS TRADER JOE STILL EYEING HIS FILL?
(0857 EST/1357 GMT)
The U.S. House of Representatives passed a bill last Friday
limiting the ability of the energy secretary to tap the
strategic petroleum reserve (SPR) except in emergencies.
Republican backers of the bill said the Biden administration
acted recklessly in selling 180 million barrels from the reserve
last year, in the biggest release ever. That drawdown and others
Biden approved have pushed the level of the SPR to its lowest
level since 1983.
The Biden administration had said it acted to counter high
gasoline prices in the wake of Russia's invasion of Ukraine.
Earlier last week, energy Secretary Jennifer Granholm said that President Biden will veto the bill if it ultimately passes Congress. On December 9, NYMEX crude futures hit a low of $70.08 before snapping higher. A week later, on December 16, the U.S. Energy Department said it would begin buying back oil for the SPR. More specifically, last October, The White House said it would buy back oil at or below about $67-$72 per barrel. On December 9, the futures bottomed at 1.09x the value of their 200-week moving average (WMA). Since the early 1990s, this long-term moving average has acted as a powerful magnet in crude sell offs:
Crude futures are now trading around $77.00, with the disparity at 1.17x.
It may remain an open question whether crude hits President
Biden's buy level. However, traders are still focused on whether
the 200-WMA, which now resides just below $66.00, and is rising
around 5-10 cents per week, will continue to work its magic as a
powerful magnet.
Meanwhile, the S&P 500 energy sector is just over 7%
below its 2014 record intraday high.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
