Crude Oil
Oil prices had a mixed day after Saudi Arabia reiterated it would aim to keep the market balanced and try to reduce tensions in the Middle East. Brent crude futures settled at $72.18 a barrel, up 21 cents from Monday’s settle. The July WTI crude future, which becomes the front month today, settled 54 cents lower at $ 62.59 a barrel. The expiring June settled at $62.99 a barrel, down 11 cents.
Oil prices fell on Tuesday , while industry data showed a surprise increase in U.S. crude inventories.
Saudi Arabia’s council of ministers repeated the country’s commitment to balancing global oil markets and preventing regional conflict amid tensions between Iran and the United States, state media reported on Wednesday.
Chinese Ambassador to the United States Cui Tiankai said on Tuesday that Beijing was ready to resume trade talks with Washington, but blamed the U.S. side for frequently “changing its mind” on tentative deals to end U.S.-China trade disputes. No further trade talks between top Chinese and U.S. negotiators have been scheduled since the last round ended in a stalemate on May 10.
A top U.S. business lobby in China said on Wednesday that nearly half of its members are seeing non-tariff barrier retaliation in China as a result of the increasingly bitter trade war between Beijing and Washington. Members said they face increased obstacles such as government inspections, slower customs clearance and slower approval for licensing and other applications.
Chinese companies looking to sign long-term agreements to buy crude oil from U.S. oil exporters have virtually disappeared, the chief executive of Enterprise Products Partners LP said on Tuesday. The trade war has all but shut down shipments of U.S. crude to China, and it is unlikely Chinese buyers will sign long-term offtake agreements with U.S. crude exporters currently
apI Data
Crude stocks continued to build against market expectations of draws. In what can only be construed as bearish data, gasoline stocks also built slightly while distillate stocks drew marginally.
Official data from the U.S Energy Information Administration’s oil stockpiles report is due later on Wednesday.
Naphtha
Asia’s naphtha crack slumped by 20% to $27.60 a tonne on Tuesday, hitting its lowest since Jan. 24, on abundant supply.
Spot demand was mostly absent, though South Korea’s YNCC and Lotte Chemical had separately bought naphtha last week for a 12-month contract starting in August.
Demand has been hit by ongoing cracker maintenance in North Asia, coupled with a recent outage in Japan and a prolonged maintenance shutdown at Hanwha Total’s cracking complex.
The June crack is lower at – $7.30 /bbl;
Gasoline
Asia’s gasoline crack also fell, dropping to a two-session low of $5.13 a barrel.
The June crack is higher at 6.35 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s 10ppm gasoil cash differential to Singapore quotes flipped to a premium on Tuesday for the first time since Nov. 16, supported by tighter supplies.
The June crack for 500 ppm Gasoil is lower at $ 14.15 /bbl with the 10 ppm crack at 14.85 / bbl. The regrade is at -$ 0.40 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Spot differentials for 380-cst high-sulphur fuel oil (HSFO) on Tuesday flipped to a premium, extending gains for a seventh consecutive session, as the market continued to be supported by a tightening supply outlook and rising seasonal demand during summer.
Firmer deal values in the Singapore trading window lifted the 380-cst cash differential to a premium of 15 cents per tonne to Singapore quotes, its widest premium since late-March and up from a discount of 44 cents per tonne in the previous session.
The June180 cst crack is lower at – $ 2.90 / bbl with the visco spread at $ 1.95 /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.