Crude Oil
Oil Prices dipped yeterday in response to a strong US dollars and a possibility of resolution on the Iran issue. Brent crude oil futures dropped to settle at $73.13 /bbl down from $ 74.77 on Monday, while U.S. crude futures settled similarly lower at $ 67.25 /bbl. A part of this drop in Brent is attributable to a change in the front month yesterday
While uncertainty still prevails about the US reimposing sanctions on China, European powers continued to affirm that they will uphold the deal.
Iran’s oil exports hit 2.6 million barrels per day (bpd) in April, the Oil Ministry’s news agency SHANA reported on Tuesday, a record since the lifting of sanctions, with China and India buying more than half of Iran’s oil.
API Data
The American Petroleum Institute (API) reported a large build of 3.427 million barrels of United States crude oil inventories for the week ending April 27, compared to analyst expectations that this week would see a smaller build in crude oil inventories of 739 KB. Gasoline stocks also built 1.67 million barrels against expectations of a draw. Distillate stocks continued to draw strongly, reducing by 4.1 million barrels.
The official DOE report will be released later today.
Naphtha
Asia’s naphtha crack rose for a second session on Monday to reach nearly a one-month high of $88.05 /MT, supported by weaker Brent crude and recent demand, although Asia’s top naphtha importer bought a lower-than-usual amount.
The May crack has improved to -$ 0.55 / bbl.
Gasoline
Asia’s gasoline crack rose to $7.24 a barrel, the highest since April 10. While stocks have receded significantly in both Asia and Europe, the market still seems oversupplied.
The May crack has improved to $ 10.35 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
As Singapore was closed yesterday, there are no current reports about prevailing premiums for 10 ppm gasoil and Jet, the focus of the middle distillate market currently.
However, the May crack has dipped to $ 15.15 / bbl with the 10 ppm crack quoting at $ 15.75/bbl. The regrade is valued at $ 0.75 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Ex-wharf cash premiums of 380-cst fuel oil eased from their recent highs as supply constrains showed some signs of easing over the near term but the downside was limited by berth congestion as suppliers worked to clear a backlog of demand and limited overall supplies of finished grade fuel oil. Ex-wharf premiums of 380-cst fuel oil eased to about $5-$6 a tonne to Singapore quotes on Monday, down from about $9-$10 a tonne on Friday.
However, firm demand for cutter stock supplies helped boost the viscosity spread higher to about $12.75 a tonne, while tight overall supplies in Singapore helped widen the front-month arbitrage spread to about $15.25 a tonne.
The May 180 cst crack has conntinued to improve to -$5.40 / bbl with the visco spread blowing out to $ 1.90/bbl. The regrade is
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Our purchase of the Naphtha Dubai crack has achieved its target today even as it would be closed out. The Regrade for May, which too we will be closing out today, should settle in the money.
The Cal -19 strips for Jet and Gasoil have eased considerably in value with our last trades looking in the money for now.
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 refiner.
Click Here to see how all our recommendations have fared
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.