Crude Oil
Prices are likely to be damped further today following another massive build as per API data which reported a build of 9.9 MB in crude, 0.7 MB in Gasoline and 1.5 MB in distillates.
If this build is reflected similarly in DOE data later today, it is going to make people really wonder.
We shall briefly take a look at the issue of compliance since it is high compliance that is ostensibly driving prices up. The graphic below from Bloomberg shows the level of compliance.
According to this graphic, the level of compliance is close to 91.5% for OPEC countries. For non OPEC countries, the level of compliance is a dismal 48.5%. Followers of the market will recall that the initial call for compliance from OPEC was subject to a similar compliance from non OPEC. We wonder what the impact of this will be.
Further, these figures do not include Iran, Nigeria and Libya. All three have increased their output significantly.
Moreover, Russia has actually exported more in January than it did in December. It defended its decision saying that the call for compliance was to cut production and not exports.
Therefore, we need to be watchful for signs that levels of compliance are slipping in any manner.
That they are actually having an impact on supplies, or will do so when refineries emerge from turn around is a matter for separate assessment.
Naphtha
Naphtha continued to remained firm . The March MOPJ crack is still valued at around $ 3.0 / bbl. The Singapore crack for March however, seems to have risen a bit out of sync. with MOPJ.
Gasoline
Gasoline too continues to be strong on paper. The March crack is valued at close to $ 14/bbl.
Middle Distillates
Gasoil is marginally higher today. The March crack is valued at $12.30 / bbl with the regrade at -$0.30 /bbl. Going forward, there could be a lower supply out of India for the next few months as the country moves towards Euro IV standards nationwide. Currently, it operates at Euro III standards for most of the country with the metropolitan and sub metropolitan areas having to use Euro IV fuels.
Fuel Oil
The Fuel Oil market continues to stay firm with the March crack valued -$ 3.25/bbl.
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.
Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity