Crude Oil
Oil prices finally receded yesterday after 6 days of continuous rise. Brent settled at $51.78 /bbl , that is 87 cents lower. WTI price also decreased just over $ 1 /bbl $49.16 /bbl.
The drop can be arguably attributed to two factors. The first of them would be pure technical profit booking. This would have been given momentum by continuous reports of overproduction by OPEC countries. Reuters reports that OPEC production in July is estimated to be at 33 Million bpd, a 2017 high. Further, some of the fear due to impending sanctions to Venezuela, which also contributed to the price rise has receded after the US actions of restricting the sanctions to the President, Nicolas Maduro, instead of the country as a whole.
A suprise crude build reported by API caused prices to drop further this morning. However, the market would wait for the DOE data today before taking any major action.
API Data
API reported a build of 1.78 million barrels in crude stocks against an expectation of a draw of 2.8 million barrels.
Gasoline stocks drew by 4.8 million barrels, and distillate stocks also drew by 1.22 million barrels.
While the gasoline draw is impressive, the crude build was entirely unexpected and is likely to dampen market spirits.
Naphtha
With most of the units at Royal Dutch Shell’s 404,000 barrels per day Pernis oil refinery in Rotterdam remaining shut following a power supply fire, the naphtha cracks have strengthened further.
The August crack is higher at $1.30/bbl.
Gasoline
Gasoline cracks have also continued to strengthen further as traders in Europe apprehend a considerable supply shortage and in turn escalating prices should the Pernis refinery take a considerable period of time to come back onstream.
The August crack is valued at $ 12.50 /bbl. today.
Distillates
Gasoil cracks have continued to dip even though traders are anticipating cargoes from Asia and the Middle East to be shipped into Europe to make up for the supply shortfall caused by the outage at the Pernis refinery. This has already impacted shipping rates which for a ‘Long-Range 2’ vessel plying the Middle East to Europe route are being quoted around 12 % higher than before the Pernis refinery outage.
The August gasoil crack is lower at $ 14.05 /bbl. The regrade has improved to -$0.80 / bbl.
Fuel Oil
Fuel Oil cracks have remained unchanged as the markets are well balanced vis a vis demand and supply. Taiwan’s CPC was heard to be seeking 20,000 mt of fuel oil with 0.3 % sulphur content and another 40,000 mt of fuel oil with 0.5 % sulphur content for September delivery.
The 180 cst August crack is unchanged at -$1.45 / bbl. The visco spread is at $0.80 /bbl.
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.
Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity