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EIA: US crude oil output to fall 260k bpd this year vs 200k bpd prior estimate

  
Analysis, Crude

EIA sees a larger fall in US output

  • EIA sees crude output at 11.02m bpd this year
  • Sees output at 11.73m bpd next year
The drop in estimated production is almost completely covered next year. I would be surprised to see that much production growth in the US given the draw on DUCs and the lack of drilling.
Meanwhile, the White House said its speaking with US oil and gas producers on how the industry can help bring down prices, according to a report.
Add this to the inflationary debate as well:
Compared with last winter’s heating costs, EIA forecasts U.S. households will spend 54% more for propane, 43% more for heating oil, 30% more for natural gas, and 6% more for electric heating. U.S. households will spend even more if the weather is colder than expected.

They also note that the National Oceanic and Atmospheric Administration expects a slightly colder winter this year than last year

US dollar gives back the post-CPI move and falls to the lows of the day

  
  Analysis

US dollar gives it back

This is the second day of choppy trade and whipsaws in the FX space. Yields and the US dollar initially rose on rising wages in the CPI report but both reversed soon afterwards.
One of the things at work is a big bid in long-dated Treasuries ahead of today’s bond auction.
USD/JPY topped out fractionally above yesterday’s fresh cycle high and has now retreated below the Asian low, carving out a short-term double top with a target at 113.00.
US dollar gives it back

The bill to increase the US debt limit has passed in the House – deal done

  
  Analysis

I should say more correctly that voting continues, but there are sufficient yes votes to pass the bill already.

This was to be expected as the Dems have the majority in the House. The bill passed the Senate last week.
Now it is off to US President Biden for signing, Biden will not delay doing so.
—
Update, final vote is 219-206 to pass the bill along party lines. Raising the debt ceiling by US$480 billion, enough through to early December,

Japan manufacturer sentiment has hit a 6-month low (Reuters Tankan for October)

  
Analysis, Economy

The Reuters Tankan monthly poll is intended to track the quarterly Bank of Japan tankan survey.

Sentiment index for manufacturers 6 in October
  • from 18 in September
  • its lowest since April
Service index rose to -1
  • from -2 prior
Comments from some of the respondents express familiar themes, in brief:
  • business hasn’t returned to what it was before the coronavirus, the worst of the pandemic is over and conditions are on a recovery trend
  • raw material prices are surging, it’s not being reflected in sales prices as consumers’ deflationary mindset remains strong
  • Demand for semiconductor-related products is strong but we’re being impacted by production cuts at car companies and firms making factory machinery
—
Poll of 503 big and mid-sized companies
  • conducted from Sept. 29 to Oct. 8
  • 267 responded

China September trade data due today – another strong showing from exports expected

  
  Analysis

There is no firmly scheduled time for this data release from China, some time after 0200GMT is usually the safe bet.

Yuan terms

China trade balance:

 

  • expected CNY 386bn, prior was CNY 376bn

 

Exports y/y:

 

  •  expected 17.1%, prior was 15.7%

 

Imports y/y:

 

  • expected 22.3%, prior was 23.1%

 

 

USD terms

China trade balance:

 

  • expected $47.6bn, prior was $58.3bn

 

Exports:

 

  • expected 21.5%, prior 25.6%

 

Imports:

 

  • expected 19.2%, prior was 33.1%
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