Crude Oil
Oil prices closed at their lowest in over a month on Tuesday as renewed doubts over a U.S.-China trade deal stoked concerns over global growth. Brent crude futures settled at $69.88 a barrel, down $ 1.36. WTI crude futures fell 85 cents to settle at $61.40 a barrel.
Yesterday’s settles were the lowest for Brent since April 4 and WTI since March 29.
Prices crashed after U.S. trade rep, Lighthizer reiterated President Trump’s threat made on Sunday. Chinese Vice Premier Liu He will travel to Washington for two days of trade talks this week, China said on Tuesday, setting up a last-ditch bid for a deal that would avoid a sharp increase in tariffs on Chinese goods ordered by U.S. President Donald Trump.
Iranian Foreign Minister Mohammad Javad Zarif told Russian news agency RIA on Tuesday that Iran was close to an oil sales deal with the European Union, despite the sanctions which have been re-imposed by the United States.
Hedge fund managers have started to increase their bearish oil positions for the first time since the start of the year, amid signs the previous bull run had become overextended and prices were ripe for a correction
API Data
Crude stocks built for the third week in a row and have climbed to their highest since September 2017. While gasoline stocks drew more than expected, distillate stocks drew less than expected. As usual, markets will await for official figures later today.
Naphtha
Asia’s naphtha had a smaller fall and reached a two-session low of $45.90 a tonne on adequate supplies.
Naphtha arriving in Asia this month from the Middle East and the West, including Europe, the Mediterranean and the United States, hit up to 5.5 million tonnes versus 4.9 million tonnes in April due to more cargoes from the former.
Spot trades were mostly muted following a deal on Monday in South Korea where SK Energy bought heavy full-range grade naphtha for second-half June delivery to Ulsan at premiums of more than $5 a tonne to Japan quotes on a cost-and-freight (C&F) basis. The deal came after Hanwha Total had on Friday picked up similar grades, also for second-half June delivery, at premiums of $6 to $7 a tonne.
The May crack has improved to – $ 6.30 /bbl
Gasoline
Asia’s gasoline crack slumped to a two-month low of $4.52 a barrel on Tuesday.
The May crack is lower at $ 4.30 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10ppm gasoil were at 7 cents a barrel to Singapore quotes on Tuesday. Cash differentials for the benchmark gasoil grade were at a 5-cent discount on Monday, having traded at a discount since November.
The gasoil market will, however, likely remain under pressure from ample supplies in the near-term as more export barrels are expected to come out of China and India.
The front-month time spread widened its contango structure to a discount of 16 cents per barrel from 12 cents on Monday.
Cash discounts for jet fuel were at 31 cents a barrel to Singapore quotes on Tuesday compared with a discount of 26 cents a barrel on Monday.
The May crack for 500 ppm Gasoil is lower at $ 12.80 /bbl with the 10 ppm crack at 13.50 / bbl. The regrade is lower at -$ 0.35 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s viscosity spread for spot fuel oil cargoes edged up on Tuesday, nearing an almost 13-month high hit in the previous week. The viscosity spread for spot fuel oil cargoes was at $13.82 per tonne on Tuesday, up from $13.25 a tonne on Monday. The viscosity spread hit a more than one-year high of $14.24 per tonne on the previous Thursday.
Ample supplies of high-viscosity fuel oils and generally tighter supplies of low-viscosity blend stocks have helped boost the price differential between 180-cst and 380-cst fuel oil.
Pakistan State Oil (PSO) last week resumed imports of low viscosity fuel oil for the first time this year as the state-owned energy firm prepares for rising utility demand in the summer.
The May 180 cst crack is slightly better at – $ 3.20 / bbl with the visco spread at $ 1.60 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
As of now, we have only Cal-20 hedges along with two Naphtha -Dubai consumer hedges which are terribly out of the money.
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.
Click Here to see how all our recommendations have fared
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.