Oil bulls had their eyes warily on OPEC as U.S. crude closed out its best quarter in a year on Wednesday on optimism about fuel demand even as producers planned output hikes and new coronavirus outbreaks were reported from a variant of the virus.
Brent Crude settled at $74.62 per barrel, up 34 cents, or 0.5% on the day. For the month, Brent rose almost 8% while for the quarter, it gained 17%.
WTI crude settled settled at $73.47 per barrel, up 49 cents, or 0.7%, on the day. For all of June, WTI rose 11, while for the quarter, it rose 24%. It was U.S. crude’s best performance in a three-month stretch since its Q2 2020 jump of 92% when it rose from $20 levels after the COV demand destruction that took it to minus $40 at one point
OPEC oil output has risen in Jun’21 to 26.24 MMB/D, up 740 KB/D MoM, as the group further eased supply curbs under a pact with its allies and as Iran’s exports climbed amid ongoing talks on reviving its nuclear deal with world powers.
US crude oil output fell 19 KB/D in Apr’21 to 11.169 MMB/D, driven by falling Gulf of Mexico output. Offshore gulf production dropped by 92 KB/D MoM, while onshore production in Texas and North Dakota rose, the US EIA reported.
India’s IOC, has made its first purchase of Guyana’s Liza light sweet crude as it seeks to diversify its crude purchases. The 1 MMB cargo will set sail around 4 Jul’21 on Greece-flagged tanker Militos for India’s Paradip port.
Libya’s NOC lifted most of its Jul’21 OSPs for its export grades from the previous month, with 11 of the 12 crude grades that the country exports will see a 50-65 c/bbl rise MoM.
Saudi Arabia is expected to increase its Aug’21 OSPs for Asia for the second straight month, tracking stronger crude benchmarks, a Reuters survey showed on Wednesday.
The DOE reported a draw that was more or less in sync with the numbers reported by the API. Furthermore, it seems to be within normal ranges of fluctuation with the Material Balance statement below as well.
However, there are a few questions about the product inventories which cannot be easily answered.
It is a bit puzzling to the lay consumer why fuel production, particularly gasoline, should drop when refining runs have actually increased. Also, the drop in gasoline demand is a touch disappointing.
At a global level, the death toll from the COVID-19 virus rose to 3.96 Million (+8,500 DoD) yesterday. The total number of active cases rose very marginally DoD to 11.45 million. (Click here for details).
Asia’s naphtha crack was assessed at $108.13 per tonne, from $102.48 per tonne in the previous session.
The July crack is higher at $1.25 / bbl
Asia’s gasoline crack was assessed at $7.25 per barrel, from $6.17 per barrel in the previous session.
The July crack is higher at 9.05 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash differentials 10 ppm gasoil were at a cent lower at a discount of 9 cents per barrel to Singapore quotes on Wednesday.
Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 7.4% to 3.9 million barrels in the week ended June 28, data via S&P Global Platts showed. The weekly stocks in Fujairah have averaged 3.9 million barrels this year, compared with 4.2 million barrels in 2020, Reuters calculations showed.
Cash differentials for jet fuel narrowed by 11 cents to a discount of 41 cents per barrel to Singapore quotes on Wednsday.
Global demand for aviation fuel stood 30% below pre-pandemic levels in early Jun’21 and may not recover fully for two more years, according to a new study published by the International Energy Forum.
Global airlines’ capacity in June was 39.2% lower compared with the levels for the same month in pre-pandemic 2019, according to aviation data firm OAG.
The July crack for 500 ppm Gasoil is higher at $5.30 /bbl with the 10 ppm crack at $ 7.30 /bbl. The regrade is at -$ 0.55 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack fell to a one-month low on Wednesday as benchmark crude oil prices were steady by the end of Asia trading hours.
The front-month VLSFO crack was at $11.19 a barrel above Dubai crude, down from $11.60 a barrel on Tuesday and its lowest since May 31, Refinitiv data in Eikon showed.
Fuel oil inventories in the Fujairah bunkering and storage hub dropped 8% to an 11-week low in the week ended June 28, data released on Wednesday showed. Inventories for heavy distillates and residues fell by 1.08 million barrels, or about 171,000 tonnes, to 11.86 million barrels, or 1.87 million tonnes
The June crack for 180 cst FO is lower at -$6.05 /bbl with the visco spread at $1.20 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh action 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 refinery.
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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.