Crude Oil
Oil plunged Thursday, with U.S. crude dropping almost 3 percent as the market grappled with oversupply fears. Brent crude futures settled at $70.75 a barrel, down $1.43. WTI crude futures also fell $1.79 to settle at $61.81 a barrel.
Market sentiment became more bearish as shifting U.S. policy on Iran had less immediate impact than initially feared. Any residual bullish sentiment also eroded as robust U.S. crude stockpiles indicated that the market was well supplied.
In Eastern Europe, countries have secured supplies to offset shipments halted due to contamination. Poland’s energy ministry said it had decided to release mandatory oil reserves following the suspension of contaminated oil deliveries from Russia in April, to secure regular output at local refineries. Belarus said on Thursday that clean oil had reached it via the Druzhba pipeline from Russia.
Despite the desire of many OPEC members to continue supply cuts, the group may eventually be forced into action to meet demand in a market that has seen prices rise more than 30 percent this year.
Russia has sent signals about potentially increasing output. In April, the country’s oil output fell month-on-month, but stayed above OPEC quotas.
The US active rig count bounced back this week as operators deployed an additional 11 oil rigs to lift the total to 857 in the week that ended Wednesday, according to S&P Global Platts Analytics.
Naphtha
Asia’s naphtha crack plunged by almost 26 percent to $39.80 a tonne on Thursday to its lowest since Feb. 19 on muted demand.
Industry sources said some buyers were expecting high supplies as Europe could be under pressure to export more as some of its crackers were offline for maintenance.
The May crack is lower at – $ 7.10 /bbl
Gasoline
Asia’s gasoline margins edged up to a two-session high of $6.94 a barrel.
Singapore onshore light distillates stocks showed a 7 percent fall to reach a 4-1/2 month low of 13.44 million barrels in the week to Wednesday, data from Enterprise Singapore showed on Thursday.
The May crack is lower at $ 6.60 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10ppm gasoil widened to 28 cents a barrel to Singapore quotes on Thursday, compared with a discount of 17 cents per barrel on Tuesday.
Singapore’s onshore middle distillates inventories rose to a three-week high of 10.74 million barrels, data from Enterprise Singapore showed on Thursday.
Cash differentials for jet fuel flipped to a discount of 9 cents a barrel to Singapore quotes on Thursday, as against a premium of 2 cents per barrel on Tuesday.
The May crack for 500 ppm Gasoil is higher at $ 12.70 /bbl with the 10 ppm crack at 13.40 / bbl. The regrade is lower at -$ 0.20 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s cash discounts for 380-cst fuel oil widened on Thursday amid weaker deal values and lower supply offers in the Singapore trading window. 380-cst cash discounts fell to minus 93 cents a tonne to Singapore quotes, the widest in a week, from minus 1 cent per tonne on Tuesday.
Fuel Oil stocks in Singapore dropped by 755 kb to 23.58 million barrels, data from Enterprise Singapore showed.
The May 180 cst crack is weaker at – $ 2.85 / bbl with the visco spread at $ 1.70 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Cal-20 Distillate cracks are once again rising to $ 20 / bbl. We shall once again resume hedging at those levels.
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.