Crude Oil
Oil fell from five-month highs on Tuesday after the IMF cut its global economic growth forecasts. Brent futures fell 49 cents to settle at $70.69 a barrel. WTI futures eased 42 cents to settle at $ 63.98 a barrel.
The IMF cut its global economic growth forecasts for 2019 and warned growth could slow further due to trade tensions and a potentially disorderly British exit from the European Union. The IMF downgrade, its third since October, added to concerns a slowdown this year will hit fuel consumption and prevent crude prices from rising even higher.
A threat by Washington to slap tariffs on hundreds of European goods halted a rally in global equities, which also dragged on oil futures.
Prices also faltered as Russia, a participant in the OPEC-led supply cuts that expire in June, signalled on Monday it wants to raise output when it next meets with OPEC because of falling stockpiles. On Tuesday, President Vladimir Putin said Russia did not support an uncontrollable rise in oil prices and that the current price suited Moscow.
U.S. crude production was expected to rise 1.43 million bpd in 2019 to average 12.49 million bpd, the U.S. Energy Information Administration (EIA) said on Tuesday, up from its previous forecast for a rise of 1.35 million bpd.
U.S. crude cargoes bound for Europe dropped to the lowest in more than a year in March and will remain low with the narrow spread between U.S. crude and Brent limiting demand. This is likely to lead to an increase in US crude stocks.
Two of Venezuela’s four crude oil upgraders, which are necessary to process the country’s extra-heavy crude into exportable grades, have restarted after halting activities due to blackouts in March. The upgraders, together with the Petrosinovensa mixing facility, were set to produce 298,000 barrels of upgraded crude on Tuesday.
Iranian oil exports, which have been laboring under US sanctions since late last year, have recovered close to prior levels, supported by unflinching demand from China and South Korea.
Physical crude loadings in Libya continue to be unaffected so far despite fighting near the capital, Tripoli, rattling the oil markets and pushing ICE Brent prices higher this week
api data
U.S. crude inventories rose by 4.1 million barrels last week, compared with analysts’ expectations for an increase of 2.3 million barrels, according to the data published by the API. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.3 million barrels, API said.
While crude stocks built, both gasoline and distillate stocks reported healthy draws that could be supportive for the market.
Naphtha
Asia’s naphtha crack fell for a seventh session running to hit a seven-week low of $40.80 a tonne on Tuesday on persistently weaker fundamentals than a month ago.
Naphtha arriving in Asia from the West, including Europe and the Mediterranean, in April is expected to be slightly more than 1.6 million tonnes. Although this is down more than 20 percent compared with March cargoes, the volumes are still slightly above 2018’s monthly average of 1.58 million tonnes.
Industry sources said the market is not lacking in naphtha cargoes as some Asian and Middle Eastern refineries prepare to return from scheduled maintenance. Formosa Petrochemical Corp, for instance, will raise throughput at its 540,000 barrels per day (bpd) Mailiao refinery to more than 82 percent from the second half of April.
The April crack has improved to -$ 6.90 /bbl
Gasoline
No fresh news on the gasoline markets today
The April crack has jumped to $ 8.05 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for gasoil with 10ppm sulphur content widened to 28 cents a barrel to Singapore quotes, partly hurt by weaker bids in the physical trading window. They were at a discount of 26 cents per barrel on Monday.
Cash discounts for jet fuel widened by a cent to 29 cents a barrel to Singapore quotes on Tuesday.
The April crack for 500 ppm Gasoil is higher at $ 12.65 /bbl with the 10 ppm crack at 13.20 / bbl. The regrade is lower at – $ 0.40 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 380-cst high-sulphur fuel oil (HSFO) cash discount resumed losses as aggressive selling pressure in the Singapore trading window on Tuesday pushed differentials for cargoes of the fuel to a near three-year low.
Ample arbitrage supplies and sluggish demand have weighed on market sentiment, pulling 380-cst cash differentials from premiums of about $3-$3.50 per tonne to Singapore quotes at the start of March.
Cash differentials for 380-cst HSFO, which snapped two straight sessions of steep declines on Monday, resumed their downward trend after slipping 19 cents per tonne from Monday to minus $2.69 a tonne to Singapore quotes.
The April 180 cst crack has dropped to – $ 2.35 / bbl with the visco spread at $ 1.35 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to report today.
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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.