Crude Oil
Oil hit their highest level so far in 2019 as the US ratcheted up the pressure on stopping trade with both Venezuela and Iran. Brent crude ended the session 26 cents higher at $69.37 a barrel. WTI futures settled at $62.58 per barrel, up 99 cents.
The United States is considering more sanctions against Iran, the fourth-largest producer in OPEC. Three of the eight countries to which Washington granted waivers to import Iranian oil have now cut their shipments from Iran to zero, a U.S. special representative said on Tuesday.
Meanwhile, a crude terminal in Venezuela, also under U.S. sanctions, halted operations again due to power problems. However, Venezuela stabilized exports in March after shipments fell about 40 percent in February from January.
But further supply losses from Iran and Venezuela could widen an OPEC-led production cut. OPEC supply hit a four-year low in March, due to the involuntary declines and as top exporter Saudi Arabia cut more than agreed.
Russia, the biggest non-OPEC producer in the so-called OPEC+ group, has yet to reach its production-cutting target. Russian oil output declined to 11.3 million barrels per day (bpd) last month, energy ministry data showed. While the country’s output was down by around 112,000 bpd from the October 2018 level, Russia has pledged to cut output by 228,000 bpd from that level.
World trade shrank by 0.3 percent in the fourth quarter of 2018 and is likely to grow by 2.6 percent this year, slower than 3.0 percent growth in 2018 and below a previous forecast of 3.7 percent, the World Trade Organization said on Tuesday
api data
In the United States, crude inventories rose by 3 million barrels in the week to March 29 to 451.7 million, API data showed on Tuesday. Analysts had expected a decrease of 425,000 barrels. Products however, showed health draws.
U.S. government data will be released on Wednesday.
Naphtha
Asia’s naphtha crack fell to a three-week low of $49.10 a tonne on Tuesday in a sluggish market.
Most buyers have not started buying cargoes through tenders for delivery in the second half of May, with the exception of LG Chem’s purchase in the previous session.
India’s naphtha offers are expected to be limited because of refinery maintenance and upgrades to prepare for the launch of cleaner Euro VI-compliant fuels from next year.
Egypt, however, recently offered up to 148,500 tonnes of naphtha for April-June loading from Suez. These cargoes would usually be processed in Asia. All four cargoes offered by Egyptian General Petroleum Corporation (EGPC) were sold to Aramco Trading, the trading arm of Saudi Aramco.
The April crack is higher at -$ 6.10 /bbl
Gasoline
No fresh news on the gasoline markets
The April crack is steady 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 24 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 23 cents a barrel on Monday.
Cash discounts for jet fuel narrowed by four cents to 18 cents a barrel to Singapore quotes on Tuesday.
The April crack for 500 ppm Gasoil is higher at $ 11.60 /bbl with the 10 ppm crack at 12.55 / bbl. The regrade is higher at +$ 0.25 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Sentiment in Asia’s fuel oil market continued to sour on Tuesday as the prompt-month time spread and cash differential for the mainstay 380-cst high-sulphur fuel oil (HSFO) extended losses.
Market sentiment has been dragged lower by signs of ample prompt supplies and sluggish demand. The 380-cst balance-of-April/May time spread was at a contango of minus 50 cents a tonne, down from parity on Monday.
In the physical market, 380-cst cash differentials extended losses for a fourth straight session on Tuesday to minus $1.17 a tonne to Singapore quotes, compared with minus $1 on Monday. 380-cst HSFO cash differentials have fallen sharply in March, weighed down by mounting selling pressure on cargoes of the fuel amid weak demand.
The April 180 cst crack is lower at – $ 1.25 / bbl with the visco spread at $ 0.95 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to consider today.
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.