Oil prices rose nearly 2% on Tuesday, erasing the previous session’s losses, as hopes for a strong economic rebound in China offset worries about U.S. interest rate hikes dragging down consumption in the world’s biggest economy.
London-traded Brent crude for April delivery settled higher by $1.44, or 1.8%, to expire at $83.89 a barrel. The more active May contract rose $1.41, or 1.7%, to $83.45.
New York-traded WTI for April delivery settled at $77.05 a barrel, up $1.37, or 1.8%.
For the month of February, Brent fell about 0.7%, while WTI dropped about 2.5%.
Tuesday’s rally in oil was predicated on bets that factory data scheduled to be released by Beijing on Wednesday — overnight Tuesday in the U.S. — would be appropriately higher to reflect the stronger economic activity anticipated in post-COVID China. Forecasts so far for the January reading of the PMI is 50.5 versus December’s 50.1, just marginally higher. Separately, the Chinese Caixin Manufacturing PMI, a Chinese private sector data, is forecast to have done better with a January reading of 50.2 versus December’s 49.2. Traders are using the datasets as a proxy for oil demand.
A part of it could also have been due to short covering at the end of the month.
Urals crude exports to China from Russia’s Western ports rose in February from the previous month, on lower freight costs and rising demand, Reuters sources said.
api data
The API reported a third huge build in crude stocks. Stocks in Cushing were also reported mildly higher. On the supportive side both Gasoline and Distillate stocks were drawn. We shall await official data later today
Asia’s refining profit margin for naphtha jumped to a nine-month high on Tuesday, the last trading day of the month, amid tight supplies from the West.
The crack climbed to $123 a tonne, the highest level since May 2022, from $118.80 a tonne a day earlier. Naphtha margins have surged over 96% this month, Eikon data showed, amid a closed east-west arbitrage, traders said.
March supplies from Northwest Europe, the Mediterranean, the United States and Russia into Asia are expected to be around 1.1 million to 1.3 million tonnes, the lowest since October 2022 and down from about 1.5 million tonnes in February, data from traders, Refinitiv Oil Research and Kpler showed.
The March crack is lower at -$1.85 per barrel
Asia’s gasoline refining profit margin eased by 24 cents $11,99 per barrel.
The March crack is higher at $14.65 per barrel.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s 10 ppm sulphur gasoil and jet fuel margins fell for the second consecutive month as persistently poor market fundamentals continued to weigh, despite thin trading liquidity.
Refining margins for 10 ppm sulphur gasoil sulphur gasoil closed the last trading session for February at $24.73 per barrel.
Cash differentials for 10 ppm sulphur gasoil fell by more than 50% month-on-month, reflecting the strong selling interest in the market. The premium dropped 4 cents yesterday to $1.15 per barrel.
Jet fuel refining margins were at $23.03 per barrel.
The March crack for 10 ppm Gasoil is lower at $24.80 /bbl. The 10 ppm regrade is at -$1.80 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s refining margin for 0.5% very low sulphur fuel oil dropped over 30% in February compared to the start of the month, data showed on Tuesday.
The front-month crack was at $9.70 a barrel at the Asia close (0830 GMT) on the last trading day of February, compared to $14.16 a barrel on the first day of the month.
Supplies to Asia in February were between 5.5 to 6.0 million tonnes, strengthening from January, Refinitiv ship-tracking data showed. About 4 million tonnes of supplies are estimated to arrive in Asia for March, with more loadings expected in the coming weeks, the data showed.
Asia’s 0.5% VLSFO cash differential dipped to $5.48 a tonne on Tuesday, while the 380-cst HSFO cash differential edged slightly higher to $2.44 a tonne.
The March crack for 180 cst FO is higher at – $13.85 /bbl with the visco spread at $3.50 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh trade 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 refinery.
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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.