Crude Oil

Crude oil ended the week strongly with a fourth day of solid gains. The June Brent future (which becomes the front month today) settled at $ 53.53 / bbl. The May future expired 13 cents lower at $ 52.83/bbl.  WTI settled 25 cents higher at $ 50.60 /bbl.

 The market is hearing more and more news of stronger compliance with production cuts .  Talks of extending these cuts has been going on all of last week.  Further, consistent and strong product draws definitely lead much strength to the bullish case.

On the bearish side, the Baker Hughes Rig count rose by 10 to 662.  This is the highest level since September 2015. 137 rigs have been added this quarter.  The last time we saw any such significant rig addition was in Q2 2011, when 152 rigs were added.

Technical Analysis
 The daily chart shows a strong bullish rise. It has been accompanied with good volumes underpinning the strength of the rally.  The MACD has turned around extremely strongly and is still rising. The weekly chart does not show the same strength as the daily charts do, so a ‘wait and watch’ approach is advocated.  Supports appear at 53.00, 52.65 and then 51.56.  Resistances are at 54.03, 54.85 and then 55.06
The Naphtha crack eased out significantly on Friday, but continued firm demand has reduced overhang and improved sentiment.  The swaps values are more or less the same with the MOPJ crack for April being valued at $ 0.9 /bbl.  The Singapore Naphtha crack for April is around -$ 0.9 / bbl.


Gasoline cracks continued to strengthen. April is valued at $ 12.35 /bbl.  The May – June spread too has eased up and has retreated to 50 cents.  This could possibly be in response to an increase in gasoline stocks in the ARA region by 10% to 981 KT.  These levels are however, 14% lower than a year ago.

Middle Distillates

The Gasoil crack has improved a bit.  The crack for April is valued at $ 11.55 / bbl.  The April regrade is is still at -$ 0.50 /bbl and flat for May.

180 CST Fuel Oil

Strong buying interest was seen in the Platts Window on Friday resulting in 380 cst prices flipping into premiums.  The Fuel Oil cracks are marginally stronger.  The April crack is  valued -$ 4.05/bbl.

ARA fuel oil inventories continued to increase. Current stocks are 3% higher than the previous week and 43% higher than the previous year as per Reuters calculations.  One VLCC is set to sail to Singapore from the area as well.

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


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