The rising streak of Crude Oil prices has increased to 7 now. Brent gained 50 cents to settle at $47.92 /bbl on the August contract which expired on Friday. The September contract settled $ 1.14 up at $ 48.77. The WTI August contract gained $ 1.11 cents to settle at $46.04 /bbl.
The gains over the last week have been impressive. WTI gained around 7% and Brent a similar amount last week. However, prices for the year are still 14% lower.
The outlook for this week has to be positive with the Baker Hughes Rig count dropping by 2. This is the first drop after 23 weeks of rises and has to signal a cap on output or so traders will feel. They were already cheered by the 100 kbd drop in US production reported Wednesday last.
Marketers will be hoping for a bonanza consumption of gasoline over the Independence day weekend in July. Gasoline prices may be at their lowest levels in 12 years for this weekend.
The stock numbers will be reported a day later this week as the US will be shut on Tuesday 4th July.
The daily charts show crude prices rising in a nice upwards channel. The September future which becomes the front month on Monday is poised at the top of the channel already going forward so even some correction would see the future resting comfortably in the channel. The weekly chart shows a candle breaking firmly away from the down trending candles of the previous weeks. This in itself is a bullish sign.
Supports would lie in the range of $ 47.22, then $46.55 – 65 area and then $ 46.20. Resistances are in the $ 48.72, $ 49.15 and the $ 50.00 marks. If $ 49.15 is taken out, then we see $50 being severely tested.
High inventories and adequate supplies continue to keep naphtha cracks under pressure. Recently, India’s MRPL and Essar were heard to have sold July loading cargoes. Naphtha stocks held independently at the Amsterdam-Rotterdam-Antwerp (ARA) storage hub at 360,000 tonnes in the week to June 29 are more than double the inventories from a year ago.
The July crack is lower at -$1.10 /bbl
Gasoline cracks have weakened slightly even as inventory held independently at the ARA storage hub fell in the week to June 29. As per the recently released data, gasoline stocks are at 862,0000 tonnes which is nearly 30 percent lower compared to a year ago at about 1.23 million tonnes.
The July crack is lower at $ 9.75 /bbl
Distillate cracks continue to climb on the back of strong demand particularly out of India wherein the Public sector refineries are undertaking a major turnaround and upgradation exercise to meet tighter BS VI specifications set to be implemented by 2020.
The July crack is higher at $ 11.85 /bbl. However, the regrade continues to perform abysmally. The July regrade is valued at -$ 0.65/bbl
While the Singapore Fuel Oil market continues to stay strong, the AG market is going long due to the inability to supply fuel to Qatar flag and Qatar calling vessels. Traders expect the tight situation in Singapore to ease out over the next few week.
Fuel oil stocks in the ARA hub rose nearly 28 percent to 1.02 million tonnes in the week to June 29 as exports to Singapore slowed this week. This is in contrast to the Singapore onshore fuel oil inventories which fell to a two-week low of 3.32 million tonnes in the week to June 28, down 5 percent or 164,000 tonnes from the previous week
The July crack has turned positive once again and is valued at $0.20 / bbl. The visco spread is slightly lower at $0.85 /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.