Crude Oil futures had a volatile day ahead of the holiday in US and finished slightly higher as the fear of being short persists. Brent crude gained 46 cents to settle at $77.76. WTI rose 20 cents to settle at $74.14/bbl.
Brent had made an intra day high of $ 78.85 before coming down to as low as $ 76.67. The last hour of trade saw the markets building length before the 4th July holiday in the US.
The early gains came after Iran appeared to threaten to disrupt oil shipments from the Middle East Gulf if Washington pressed ahead with sanctions. U.S. crude rose above $75 a barrel for the first time since 2014. Prices retreated as some thought talk of supply disruptions might be overblown, and could be moving to liquidate bullish positions. Pressure to liquidate may have accelerated ahead of the U.S. holiday on Wednesday.
There is also concern about when production will restart at Syncrude Canada’s 360,000 barrels per day (bpd) oil sands facility near Fort McMurray, Alberta, hit by a power outage last month and likely to remain offline through July. A quicker restart could boost supplies at the Cushing, Oklahoma, delivery hub for U.S. crude.
Stocks drew across the board according to the weekly report published by the API. The draw in distillates was against expectations. The official DOE data would release on Thursday as the US is closed today.
Asia’s front-month naphtha crack rose to a 2-1/2 week high of $80.30 a tonne on Tuesday as demand was expected to stay firm.
The July crack has improved to -$ 1.45 / bbl
Asia’s gasoline prices remained under pressure from ample supply, with the crack value reaching a near two-week low of $3.64 a barrel.
The July crack is steady at $ 7.10 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s refining margins for 10ppm gasoil dipped on Tuesday, lingering close to seven-month lows, while cash differentials marginally narrowed their discounts but stayed near the lowest levels for this year due to abundant supplies.
Cash differentials for gasoil with 10ppm sulphur content narrowed their discounts by a cent on Tuesday and were at a discount of 24 cents a barrel to Singapore quotes. Cash differentials for jet fuel also narrowed their discounts and stood at 25 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 28 cents on Monday.
Diesel exports from China have risen recently and will likely increase further in the near term as regional refineries return from seasonal maintenance. Meanwhile, India’s diesel exports are also on the rise due to weaker domestic consumption during monsoons. Diesel demand in India should start picking up in a month or so as the peak rainy season dissipates.
The July crack is higher at $ 12.05 / bbl with the 10 ppm crack at $ 12.95 /bbl. The regrade is higher at $ 1.50 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s fuel oil markets shed recent gains to ease for a second straight session on Tuesday as cash premiums and time spreads narrowed their premiums to multi-session lows. Despite the weaker prices on Tuesday, the fundamentals underpinning the near-term fuel oil market remained bullish with firm seasonal demand and limited supplies continuing to characterize the market.
The July crack is stronger at -$ 1.70 / bbl with the visco spread at $ 1.20 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
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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.