Crude Oil futures fell Monday as supplies from Saudi Arabia and Russia rose while economic growth stumbled in Asia amid escalating trade disputes with the United States. Brent crude fell $1.93 to settle at $77.30. WTI fell to settle down 21 cents at $73.94.
The premium for U.S. crude for the front month compared with the second month widened to as much as $2.38 a barrel, the most since Aug. 20, 2014. Cushing supplies are down partially due to an outage in Syncrude Canada’s oil sands facility near Fort McMurray, Alberta, which is likely to remain offline at least through July.
Despite the relief from Saudi Arabia and Russia, oil markets remain tense because of unplanned outages from Canada to Venezuela and Libya. Looming U.S. sanctions against Iran further contribute to expected tightness. Trump threatened in an interview that aired on Sunday to put sanctions on European companies that do business with Iran.
Asia’s front-month naphtha crack for second-half August was at a three-session low of $76.03 a tonne on Monday on weaker fundamentals caused by expectations of more open-specification grade supplies. This has hit premiums of the benchmark grade harder than the heavier grades of naphtha.
The July crack has improved to -$ 1.85 / bbl
Asia’s gasoline crack edged up 3.1 percent from Friday to reach a two-session high of $3.97 a barrel. The current value has fallen from this year’s high of nearly $10 on May 22 due to ample supplies and high oil prices.
The July crack has fallen to $ 7.10 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s jet fuel crack edged up by about 4.2 percent from Friday to nearly $14 a barrel on Monday but the current value was 8.8 percent below the average for the first six months of this year as high oil prices weighed.
Overall middle distillates stocks were ample with inventories across key regions of the U.S., Fujairah and Singapore being higher week-on-week.
More oil products from Russia were expected with fuel exports from the Black Sea port of Tuapse set to rise by 1.9 percent on a daily basis to 1.472 million tonnes in July from 1.398 million tonnes planned in June.
The July crack is lower at $ 11.85 / bbl with the 10 ppm crack at $ 12.75 /bbl. The regrade is higher at $ 1.45 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Cash premiums of Asia’s mainstay 380-cst high sulphur fuel oil eased from a more than three-year high reached in the previous session amid weaker deal values for cargoes of the fuel in the Singapore trading window on Monday.
A persistent supply crunch of fuel oil to Asia driven by reduced shipments from exporters such as Iran and Venezuela pushed the fuel’s cash premium to Singapore prices to a three-year peak on Friday, with levels expected to stay high for another month.
Fuel oil exports from northwest Europe to Singapore have also dropped, down to an average monthly total of 1.074 million tonnes in the first six month of 2018 versus 1.308 million tonnes at the same time in 2017.
The July crack is stronger at -$ 1.85 / bbl with the visco spread at $ 1.20 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
The Cal 19 Jet and Gasoil cracks have eased nearly $ 2/bbl from the highs they achieved. This is a valuable lesson to be learnt about the benefits of hedging.
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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.