Oil Prices continued to climb as they posted an eight straight day of gains in what is now the longest unbroken rally in more than five years! Brent closed up $0.91 at $49.68 /bbl while WTI closed up $1.03 at $47.07 /bbl.
Adding to this newfound optimism is bullish news emanating from the North Sea with a few traders suggesting that North Sea BFOE crude oil supply is expected to fall to its lowest level in three years next month. They elaborated that Brent crude oil stream would load only four cargoes of 600k barrels each, for a daily supply rate of 77kb/d, leaving output of BFOE crudes at just 716kb/d, its lowest level since August 2014.
The above notwithstanding, the threat of markets being oversupplied still continues with latest numbers showing that the output from OPEC hit a 2017 high last month. OPEC production in June rose 280,000 bpd to 32.72 million bpd, despite the group’s pledge to hold back output.
Naphtha physical market remains under pressure as spot cargoes continue to be sold at discount levels due to ample supplies. Evidencing this is export data out of India which shows that the country exported an average of close to 750,000 tonnes of naphtha per month from January to May 2017 versus an average of 606,000 tonnes last year.
The July crack is however marginally higher at -$1.00 /bbl
Gasoline cracks have managed to strengthen as traders anticipate that the US Inventory Data slated to be released a day late this week (due to the 4th July holiday in the US) will show a considerable draw in inventories.
The July crack is stronger at $ 10.10 /bbl
Distillate cracks continue to strengthen on the back of strong demand from India, Kenya and Tanzania. India’s Hindustan Petroleum Corp Ltd (HPCL) is heard to be seeking 60,000 tonnes of 40ppm sulphur diesel for delivery at Vizag between 8-12 July 2017.
The July crack is higher at $ 12.40 /bbl. However, the regrade continues to perform abysmally. The July regrade is valued at -$ 0.80/bbl
Fuel Oil cracks have lost a bit of steam on account of the smart increase in crude prices. However, the cracks are likely to stay supported in the near term as demand is strong.
The July crack is valued at -$0.20 / bbl. The visco spread is at $0.80 /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.