Written on: July 1, 2025
Tuesday, July 1, 2025
Crack spreads are narrowing as crude oil futures are seeing gains of around one percent, while futures for refined products were trading flat-to-lower as of this writing in the overnight session on Tuesday. Further depreciation in the US dollar was supportive, while losses in both European equities and futures for the major US stock market indexes likely weighed on the price action. Market participants looked ahead to the final June US Manufacturing PMI, the ISM Manufacturing Index, the Job Opening and Labor Turnover Survey (JOLTS), and to US construction spending data for further direction.
In economic news from China last night, the Caixin Manufacturing PMI for June came in at 50.4, up from a 48.3 print in May and above the 49.0 Econoday consensus. The Shanghai Composite closed 0.39% higher overnight, while the Nikkei in Japan dropped 1.24% lower. The Hong Kong Stock Exchange, on the other hand, was closed for a holiday. In India, the final Manufacturing PMI rose from 57.6 in May to 58.4 last month, matching the flash estimate. In European economic news, the June Harmonized Index of Consumer Prices (HICP) for the Eurozone showed a 2.0% year-on-year increase in consumer prices, as widely expected. The final June Manufacturing PMI for the Eurozone as a whole came in at 49.5, slightly above the 49.4 flash print. The Index for France also beat the flash estimate, coming in at 48.1 (vs 47.8). The final June S&P Global Manufacturing PMI for the UK (47.7) and Germany (49.0) saw no changes to their respective flash readings. Lastly, the unemployment rate in Germany held steady at 6.3% last month, slightly below forecasts calling for a 0.1 percentage point increase in the claimant count. European equities were trading in the red this morning as the UK FTSE 100 was down 0.33%, the French CAC 40 had lost 0.50%, and as the German DAX had fallen by 0.64%. Futures for the major US stock market indexes are seeing losses of between 0.07% (Dow futures) and 0.31% (Nasdaq futures). As of this writing, the US dollar index had sold off 0.40%, which is supportive for crude oil prices.
Crude oil futures turned back south yesterday with losses in European shares and news that OPEC+ is considering another oil production hike of 411 thousand barrel per day, despite gains in US equities and a drop in the US dollar index. Brent crude settled 16 cents weaker at $67.61 a barrel, WTI crude dropped 41 cents lower to close at $65.11 a barrel, gasoline futures lost 1.00 cents to hit $2.0798 per gallon, heating oil futures settled 3.86 cents higher at $2.3458 per gallon and natural gas futures dropped 28.3 cents to settle at $3.456 per MMBTU.