OIL MARKET WEEK AHEAD Saudi Imports Drop to a Record Low

There has been a sharp reversal in the Saudi exports of oil into the US with the Kingdom seemingly turning 180 degrees over the last month. Having flooded the US market with crude oil in April and May, oil imports from Saudi Arabia have now shrunk to a minimum. During the first two weeks of June only one Saudi cargo ship reached the US, according to Bloomberg, the equivalent of about 133,00 bbl/d, or a fraction of the 1.3m bbl/d offloaded in April. This should begin to be reflected in the API and EIA weekly petroleum data on Tuesday and Wednesday, but more importantly it will trigger a significant change in stock levels from mid-July onwards. It takes 45 days for Saudi tankers to reach the US and barely any have left the country this month.

Combine this with a return in domestic transport demand to almost 80% of the pre-corona levels, and rising, unless the process gets stalled by the new outbreaks in the Southern states, the supply picture towards the end of July will be significantly different from the present oversupply.

EasyJet earnings

Budget airline easyJet will report its results on Tuesday. Unlike the big state flagship names like Lufthansa, British Airways-owner International Consolidated Airlines, or Air France, easyJet is unlikely to see any state support in battling with the corona-induced losses and its results will to some degree more closely reflect the reality of European travel demand.

Having in the past flown hundreds of flights into every sunny corner of Europe and the Middle East, the company resurrected only a few of the most popular flight routes across Europe on 15 June. The most interesting part of the company’s results will not be so much the actual earnings, or rather losses, caused by the pandemic, but a sense of whether the European tourist market is recovering and at what rate, particularly as the borders keep closing and opening daily. With temperatures rising in the UK and the Health Secretary threatening to close domestic beaches because of a breakdown of social distancing, Britons may have an extra reason to want to swap Britain for one of the southern European countries where the coronavirus is now already in the rearview mirror.

In the US the airline earnings calendar kicks off on 9 July with Delta Airlines.

Dallas Fed Manufacturing Business Index

The Dallas Fed Texas Manufacturing Outlook Survey would normally not be a major indicator for the oil market but under the current circumstances, where the new COVID-19 case count in the state has risen to over 5,000 each day, this week the monthly outlook survey for the Texan industry will provide an insight into how much of the state’s industrial demand for oil still remains intact. The indicator, which shows changes in output, order levels and prices, is expected to have dropped to –59 in June compared with -49 in May, despite the reopening of the state in April.

Source: EIA

When	What	Why is it important
Mon 29 Jun 08.00	Dallas Fed June manufacturing business index	An insight into the Texas manufacturing as the spread of the pandemic picks up
Tue 30 June 07.00	Easyjet earnings	A proxy for European air travel demand. Look out for the company’s outlook for the summer travel season
Tue 30 June 21.30	API weekly crude oil stocks	Previous increase 1.749m
Wed 1 Jul 02.45	China June manufacturing PMI	China’s manufacturing is back to expansion mode, but only just
Wed 1 Jul 08.55	Germany June manufacturing PMI	German manufacturing is unlikely to show much change from May, still in contraction
Wed 1 Jul 15.00	US June manufacturing PMI	Manufacturing has improved from May and is expected to show a reading of 49, just below the key 50 level which indicates expansion
Wed 1 Jul 15.30	EIA US crude oil stocks	The weekly rises should show either a significant slowdown or even a reversal
Wed 1 July 20.30	US total June vehicle sales	A proxy for future transport demand
Thu 2 July 13.30	US initial jobless claims	Last up 1.62m
Thu 2 July 18.00	Baker Hughes June International rig count and weekly US rig count	A change in the weekly schedule because of Independence Day

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.