Crude Oil
Crude Oil closed marginally higher on Friday as traders squared off shorts for the weekend. Brent settled at $ 52.05 / bbl. WTI fell by 37 cents to settle at $ 49.33 /bbl. With Singapore and London closed for the Labor day holiday on Monday, traders were happy to sell in the market bringing prices lower. The sell off was caused by reports that Libyan production had increased to above 760 kbpd, the highest since December 2014 and resumption of shipping of Canadian crude by Syncrude
Brent settled at $51.52/bbl (the July contract) while WTI settled at $ 48.84/bbl, down 40 cents over Friday.
Over the weekend, Baker Hughes reported an addition of 9 oil rigs by American firms. In addition, President Trump signed an executive order allowing the exploration for oil and in areas that had been hitherto banned.
Saudi Aramco has further cut the price of Arab Light by 40 cents to an OSP of Oman-Dubai – $0.85 /bbl in a bid to protect its market share in the east.
Technical Analysis
The technical analysis section has been written as at the end of the week and does not take into account Monday’s price movement
Technically, Brent appears to have found support off the 200 DMA and is resting strongly on that support. It has bounced off the support more than once this last week and more than once before. Therefore, this support has to be regarded as very strong. The weekly candle too was a doji candle indicating uncertainty in the market as to direction.
Supports are seen in the $51.00-40 area which is the 200 DMA, then at the $ 50.00 area which is a psychological barrier and then at $ 49.75, the last weekly low. Resistances are seen at $ 52.33, $ 53.1 and $ 53.55 above. The last is the 50 DMA.
With oscillators firmly in the oversold area and turning, the bias would be to the upside as long as $51.35 (the 200 DMA) is not breached.
Since we are still above the 200 DMA, our bias remains intact.
Naphtha
Naphtha continues to be traded actively in the window. 62 trades were done in Naphtha during April. This is more than the trades done in the first quarter of the year. Trafigura and Itochu have done 45 and 30 trades respectively in the period since 6th April.
However, the physical Naphtha crack continued to fall.
The paper Japan Naphtha Dubai crack recovered as dramatically as it fell on Friday. The May crack is at – $ 0.5 /bbl. The Singapore Naphtha – Dubai crack is at -$ 1.7 /bbl.
Gasoline
The gasoline physical crack recovered a little bit from the battering it took on Thursday in the wake of the Singapore and US stocks. However, the paper crack for May continued to drop and is around $ 9.60 /bbl today.
Middle Distillates
The Gasoil crack continued to get hammered. The May crack is valued at $ 10.35 / bbl. The regrade however, is steady at -$ 0.70 / bbl
180 CST Fuel Oil
Fuel Oil cracks continue to appreciate. The May crack is valued at -$ 3.10 / bbl today.
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.