On the demand side, while you have seen demand growth week on week, the annual growth is marginally negative. Even if you grant increased efficiency of vehicles, it means that stocks are going to remain surplus. Even today, stocks are higher than last year’s levels
Therefore, there do not appear to be prospects of an immediate rise in prices for now at least.
Naphtha cracks continue to increase on observed physical demand. The June Japan Naphtha- Dubai crack is valued at -$0.95 /bbl.
Gasoline also appear to be stronger. While the June 92 Ron-Dubai crack is unchanged at $11.7 /bbl., we are seeing increased backwardation in the flat price. Singapore stocks drew by more than 700 kb to reach their lowest level in six months
With Ramadan round the corner, it is not unreasonable to expect cracks to remain strong for this month. However, we would be watchful going ahead.
Gasoil and Jet cracks weakened significantly in the face of ample supplies of both products. Though Singapore distillate stocks dropped by 1.1 million barrels in the last week, they are still at extremely high levels.
The June crack is valued at $ 9.90. The regrade, is at $0.35 /bbl. While the regrade is at the same level it was yesterday, August and September levels have fallen by around 10 cents each.
Fuel Oil stocks drew by only 28 kb this week. While this statement looks pretty innocent, stocks are currently at the lowest level in five years!
While a lot of stocks are reported to be in floating storage, we are yet to see them surface. The June 180 cst crack has jumped in value at -$ 2.2 / bbl. The visco spread is at $ 1.30 / 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.