Crude Oil
Oil prices rose more than $1 a barrel on Tuesday after news that China and the United States were resuming trade talks. Brent crude futures lost $1.20 to settle at $62.14 a barrel. WTI crude futures rose $ 1.97 to settle at $53.90 a barrel.
China confirmed its get together with US next week at the G20 in Japan.
Fears of a confrontation between Iran and the United States have been downplayed by President Trump who said they were not worth going into a war over.
OPEC has again proposed to move dates of its next meeting, now suggesting July 1-2, two sources familiar with the matter said, as Saudi Arabia, Iran and non-OPEC Russia are struggling to agree a compromise. Previous proposals included dates for a meeting of the OPEC followed by a meeting with non-OPEC allies on June 25-26 and July 11-12
aPI data
The stock data released by the API yesterday suggested that the system was in a ‘steady state’ with minimal changes. This was roughly in line with market expectations as well. The official DOE data releases today.
Naphtha
Asia’s naphtha crack rose to an almost three week high of $8.60 a tonne on Tuesday as concerns over Middle East tensions lingered.
But the current naphtha margin has already lost 86.7% of its value when compared to this year’s peak in March at almost $65 due to recent surplus supplies.
Expectations of South Korea’s LG Chem restarting a mega scale cracker in Daesan by June 18 had also given the market some support. But it could not be confirmed if the petrochemical maker had restarted the unit.
Lower overall amounts of naphtha coming to Asia may have also helped, with the total naphtha flow into Asia at up to 5.2 million tonnes in June, down by 400,000 tonnes from May.
The July crack is higher at -$6.30 /bbl
Gasoline
No fresh news on the gasoline markets.
The July crack is steady at $ 4.50 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10ppm gasoil were at a discount of 5 cents a barrel to Singapore quotes, compared with a discount of 16 cents a barrel on Monday.
Cash differentials for jet fuel were steady at a discount of 4 cents a barrel to Singapore quotes on Tuesday.
However, increasing supplies from refineries returning from seasonal turnarounds and new refining capacities in the region would keep the jet fuel market under pressure going forward.
Refining margins for gasoil with 10ppm sulphur content slipped eight cents to $15 a barrel over Dubai crude on Tuesday.
The July crack for 500 ppm Gasoil is lower at $ 14.25 /bbl with the 10 ppm crack at $ 14.95 / bbl. The regrade is at +$ 0.30 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s fuel oil market firmed on Tuesday, fuelled by concerns of tightening supply in the near term, lifting 380 cst high sulphur fuel oil (HSFO) cash premiums and time spreads higher.
Rising seasonal demand in the Middle East as well as concerns of supply disruptions amid heightened geopolitical tensions there following last week’s attacks on two oil tankers in the Gulf of Oman have contributed to a tighter supply outlook.
Cash premiums for 380 cst HSFO jumped to a six month high of $4.87 a tonne to Singapore quotes on Tuesday, up from $2.85 a tonne in the previous session as buying interest intensified. The July/August 380 cst time spread widened its backwardated structure to a four session high of $9.75 a tonne on Monday, up from $8.50 a tonne in the previous session.
The July180 cst crack is lower at – $ 0.80 / bbl with the visco spread at $ 1.55 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No Fresh action for today.
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.