Crude Oil
Oil climbed about 2 percent to new 2019 highs on Monday, after positive signs for the global economy. Brent crude ended the session up $1.43 at $69.01 a barrel after rising to $69.19, its highest since November. WTI futures settled up $1.45at $61.59 per barrel.
U.S. stocks rallied after upbeat manufacturing numbers from the United States and China eased worries about slowing global growth.
China’s manufacturing sector unexpectedly returned to growth for the first time in four months in March.
U.S. manufacturing numbers also came in better-than-expected in March, helping investors overlook soft retail sales data for February.
The United States and China said they made progress in trade talks that concluded on Friday in Beijing, with Washington saying the negotiations were “candid and constructive” as the world’s two largest economies try to resolve their trade war. China’s State Council said on Sunday that the country would continue to suspend additional tariffs on U.S. vehicles and auto parts after April 1, in a goodwill gesture following a U.S. decision to delay tariff hikes on Chinese imports.
Hedge funds and money managers raised bullish wagers on U.S. crude to the highest in more than five months, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. Brent crude speculators also raised net long positions by 13,429 contracts to 322,035 in the week to March 26, data from the Intercontinental Exchange showed. That was the highest level since late October.
On the supply front, booming American production has steadied, with the U.S. government reporting on Friday that domestic output in the world’s top crude producer edged lower in January to 11.9 million barrels per day.
Output from OPEC countries fell by 280,000 barrels per day (bpd) from February to 30.4 million bpd, its lowest monthly rate since 2015.
Euro zone inflation unexpectedly slowed in March, adding to the pressure on the European Central Bank (ECB) as it battles an economic slowdown which threatens to undo years of stimulus.
Naphtha
South Korea’s LG Chem was among the first in the country to buy naphtha for second-half May delivery through a tender. The petrochemical firm may have paid around $4.50 a tonne premium to Japan quotes on a cost-and-freight (C&F) basis but pegged to a 45-day pricing formula instead of the usual 30 days..
The April crack has tanked to -$ 6.30 /bbl
Gasoline
Asia’s gasoline crack rose to just over a week high on Monday at $7.59 a barrel on strong fundamentals as demand across regions led to a recent draw down of stocks globally. However, this morning the product prices do not appear to have moved with crude prices and the crack has plumeted
The April crack is lower at $ 6.70 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10ppm gasoil were at a discount of 23 cents a barrel to Singapore quotes on Monday, as against a discount of 21 cents a barrel on Friday.
The gasoil EFS was around minus $11 per tonne on Monday which meant that the East West arbitrage, which breaks even below -$ 15 per tonne, was shut.
Cash discounts for jet fuel widened by two cents to 22 cents a barrel to Singapore quotes on Monda.
The April crack for 500 ppm Gasoil is lower at $ 11.45 /bbl with the 10 ppm crack at 12.40 / bbl. The regrade is lower at +$ 0.20 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Ample supplies and sluggish demand for marine fuels continued to dent Asia’s fuel oil market, pulling cash discounts of Asia’s 380-cst high-sulphur fuel oil (HSFO) to a one-year low on Monday following sharp losses in March.
The 380-cst cash differentials dived to minus $1 per tonne to Singapore quotes, compared with minus 27 cents per tonne on Friday.
The 380-cst HSFO cash differentials in the previous month peaked at a premium of $3.35 per tonne to Singapore quotes on March 6, but have since fallen steadily as prompt supplies outpaced demand.
The April 180 cst crack has dropped to – $ 1.10 / bbl with the visco spread at $ 1.05 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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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.