Crude Oil
Oil prices hit highs not seen since 2014, built on the ongoing drawdowns in global supply and as Saudi Arabia looks to push prices higher, though U.S. crude gave back gains in the afternoon to finish lower.. Brent crude oil futures gained 30 cents to settle at $73.78 /bbl, while U.S. crude futures fell 18 cents to settle at $ 68.29 /bbl. This fall however, may be due to the expiring WTI contract.
OPEC found that OECD inventories have fallen to just 12m bbl over the five-year average during a Joint Technical Committee meeting on Thursday. The technical panel met in Jeddah, Saudi Arabia, ahead of the ministerial meeting on Friday which will be attended by OPEC’s partners as well. The meeting on Friday will supposedly also touch on issues like moving the five-year average metric, according to sources who spoke to Reuters.
The Omani oil minister was quoted as downplaying the risk of higher prices ahead, saying that $65-70/bbl was a “more-realistic” target and that a $100/bbl was unlikely to be a concern.
Naphtha
Asia’s naphtha crack settled at a 2 and a half month low of $ 65.90 /MT yesterday as there appeared to be no change from the ongoing outlook of ample supplies and reduced demand due to turnarounds
The May crack has managed to stay unchanged at -$ 2.00 /bbl
Gasoline
Gasoline stocks have fallen across the globe this week in the major storage centres. Singapore stocks of light distiillates dropped by 143 KB to 13.6 million barrels, just below the previous year’s levels. ARA Gasoline stocks dropped by 54 KT to reach 1.25 million tons. This is still the highest level for this time of the year. US Gasoline stocks had been reported lower by nearly 3 million barrels by the DOE on Wednesday.
Click Here for a graphical depiction of Global Light Distillate stocks by region.
The May crack is lower at $ 9.85 /bbl
Distillates
Asia’s cash differentials for 10 ppm gasoil rose to 47 cents a barrel to Singapore quotes, up from 37 cents on Wednesday. Cash differentials for jet fuel stayed at 94 cents a barrel to Singapore quotes on Thursday.
Singapore stocks of middle distiillates dropped to 9.58 million barrels, their lowest level in five weeks and their lowest level for this time of the year. ARA gasoil stocks also dropped by 186 KT to 3.12 Million tons. Distillate stocks in the US have fallen by 3.1 million barrels last week. It is going to be this part of the barrel which will largely determine not only refining margins, but also crude oil prices in the medium run.
Click Here for a graphical depiction of Global Distillate stocks by region.
The May gasoil crack has increased $ 14.80 /bbl with the 10 ppm crack at $ 15.40 /bbl. The regrade has eased to $ 0.80 /bbl.
Fuel Oil
Asia’s front-month high-sulphur fuel oil crack widened its discount to Brent crude on Thursday, falling to the widest discount since August 2016 amid the rise in crude prices. The May 180-cst fuel oil crack to Brent settled at minus $9.64 a barrel on Thursday, down 72 cents a barrel from the previous session.
Singapore stocks of heavy distiillates dropped to 17.9 million barrels, their lowest level in more than 10 months. ARA Fuel Oil stocks however, rose by 152 KT to 1.14 Million tons. These levels are higher than last year’s levels and close to the highest for this time of the year.
Click Here for a graphical depiction of Fuel Oil stocks by region.
The May 180 cst crack has is unchanged at -$ 6.40/ bbl. with the visco spread marginally higher at $ 1.75 /bbl
Hedge Recommendations
Hedge recommendations are essentially made for refiners. These are not trading positions as such. The rationale of these positions is to lock in extraordinary levels for the refiner.
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About this blog
This blog post attempts to give a top level summary of the Singapore market goings on to a person who seeks to obtain a directional sense of the market on a daily basis.