Crude Oil
A draw in US Crude stocks enabled crude futures to counter the uncertainty caused by trade tariffs yesterday. Front month Brent managed to settle just 10 cents lower at $68.02 /bbl. WTI futures eased 14 cents to to settle at $63.37/bbl.
The Crude draw provided immense relief to bulls who were reeling under the impact of the tariffs imposed by the US and China on imports. At one time yesterday, Brent hit a session low of $66.69 and U.S. crude slumped as low as $62.06.
The US Department of energy confirmed yesterday that Crude Oil stocks in the US had decreased, indeed by a greater volume than that reported by the API. The change in stocks can be seen below
The large draw is attributable mainly due to a rise in exports (around 600 kbpd), combined with a drop in imports (250 kbpd). An increase in run rates of around 150 kbpd was also not insignificant. However, stocks in Cushing have risen by 3.7 million barrels to over 35 million barrels now.
The draw in gasoline is not really explainable as can be seen from the material balance statement below. The build in Distillates is largely because of a drop of close to 500 kbpd in demand, though this was offset by a 230 kbpd increase in exports.
While global distillate stocks continue to be a matter of concern, some small relief has been provided by the build in stocks this week.
Naphtha
Asia’s naphtha crack fell for the third straight session to $88.03 a tonne, lowest in about a week. Cash premia, though, remain steady at current levels of mid teens.
The balance April crack for Naphtha has fallen further to – $ 0.15 /bbl.
Gasoline
Asia’s gasoline crack edged up 16 cents to $ 8.17 /bbl on Wednesday. A lot of activity was seen in the trading window yesterday with around 400 kb of gasoline, the highest volume since November 2, changing hands. Vitol is being seen as a major seller of gasoline in this month having sold around 600 kb till date.
Light Distillate stocks in Fujairah fell by 386 kb to 7.8 million barrels. This is around 12% higher than at the same time last year. Stocks in Japan have risen by 400 kb to 10.35 million barrels.
The balance April crack has improved to $ 11.30 /bbl .
Distillates
Asia’s jet fuel cash differentials rose on Wednesday to the highest in nearly a month, helped by higher deal values and tighter supplies on the back of seasonal refinery turnarounds in the region. Cash premiums for jet fuel rose to $1.25 a barrel to Singapore quotes, from 90 cents on Tuesday.
Cash premiums for 10 ppm gasoil were constant at 39 cents per barrel.
Stocks in Fujairah decreased by 478 kb to 1.74 million barrels. This is less than half the stock levels of the previous year.
The April gasoil crack has eased to $ 15.30 /bbl with the 10 ppm crack at $ 16.05 /bbl. The regrade is marginally lower at $ 0.80 /bbl.
Fuel Oil
Asia’s prompt-month viscosity spread extended gains for a sixth consecutive session to a near three-year high on Wednesday after almost three weeks of steady gains. The April viscosity spread settled at $10.75 a tonne on Wednesday, up from $9.75 a tonne in the previous session and its highest since June 2015. Concerns of tight blendstock supplies over the coming month have helped boost the low-viscosity fuel oil market in recent weeks
Heavy Distillate stocks in Fujairah dropped by 100 kb to 7.05 million barrels. This is 36% lower than the levels last year.
The April 180 cst crack has improved further to -$ 5.60/ bbl with the visco spread has moved still wider to $ 1.85 /bbl
Hedge Recommendations
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.
Today’s status of active recommendations is below.
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.