Crude Oil
Oil prices climbed by more than $1 a barrel on Tuesday as U.S. states begin to reopen after coronavirus lockdowns.
Brent futures rose $1.25 to settle at $39.57 a barrel. U.S. crude rose $1.37 to settle at $36.81 a barrel.
The gradual reopening of businesses in a growing number of U.S. states and countries after shelter-in-place mandates caused by the coronavirus pandemic also boosted fuel demand and aided oil prices.
US shale oil producers are beginning to reverse production cuts as prices recover from historic lows, underscoring shale’s ability to quickly adjust to pricing and posing a challenge to OPEC as it considers extending production curbs.
The EU on Tuesday rejected any suggestion that the Group of Seven advanced economies could be expanded to include Russia and warned Washington that it could not change the rules for the group on its own.
api data
U.S. crude inventories fell by 483 KB in the week to May 29 to 531 million barrels, compared with analysts’ expectations for a build of 3.5 million barrels. However, as product stocks built far more than expected, a wait and watch attitude is perhaps best.
Covid 19x`
At a global level, the death toll from the COVID-19 virus rose to 382,412 (+4,669 DoD) yesterday, with the total number of confirmed infections at 6,447,901 (+115,215 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack was at $41.13 a tonne, marginally up from Friday. European exports of naphtha to Asia have fallen after a sharp rise in late March and April, as demand from the regional petrochemical sector held firm and refineries have cut output.
The June crack has improved to -$1.55 / bbl.
The July crack is at -$1.55 / bbl.
Gasoline
Asia’s gasoline crack was at a discount of $1.35 a barrel to Brent versus a discount of 49 cents on Friday.
India’s gasoline and gasoil sales in jumped sharply in May’20 MoM but industry analysts expect a full-scale recovery to be months away as the monsoon season approaches while manufacturing activities remain low and transportation demand takes a hit in some parts of the country.
The June crack has bounced back to -$0.60 /bbl.
The July crack is at $0.25 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash discounts for jet fuel narrowed on Monday to their lowest level in over two months, helped by firmer buying interest in the physical market.
Cash discounts for jet fuel narrowed to 52 cents a barrel to Singapore quotes on Monday, a level not seen since March 18. They were at a discount of 77 cents per barrel on Friday.
Global flying capacity for the week ahead rose by 5.7 million seats, or 267,000 extra flights, to 36.7 million seats, as nearly 60 airlines relaunched services this week, but flying seat capacity is still 66% lower YoY, according to air travel data provider OAG.
Cash discounts for 10 ppm gasoil were at 36 cents per barrel to Singapore quotes, as against a 41-cent discount on Friday.
The June crack for 500 ppm Gasoil is higher at $1.80 /bbl with the 10 ppm crack at $ 4.30 / bbl. The regrade is at -$ 1.50 /bbl.
The July crack for 500 ppm Gasoil is at $3.55 /bbl with the 10 ppm crack at $ 4.40 / bbl. The regrade is at -$ 2.50 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The front-month 380-cst HSFO barge crack narrowed its discount to Brent crude to minus $6.78 a barrel on Monday from minus $7.12 a barrel on Friday and was near a 10-month high of minus $6.44 hit on May 19.
The June crack for 180 cst FO is lower at – $3.55 /bbl with the visco spread at $1.25 /bbl.
The July crack for 180 cst FO is at – $2.20 /bbl with the visco spread at $1.35 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action for 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 refinery.
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.