Crude Oil
Oil prices had a mixed day today. Brent futures settled at $69.40 a barrel, up 9 cents. WTI futures settled at $62.10 a barrel, falling 36 cents .
Brent oil prices briefly crossed $70 a barrel for the first time since November as expectations of tight global supply outweighed pressure from rising U.S. production and less robust global demand indicators. Brent has gained 30 percent this year, while WTI has risen nearly 40 percent, underpinned by U.S. sanctions on Iranian and Venezuelan crude, OPEC production cuts and rising global demand.
U.S.-China trade talks made headway last week in Beijing and White House economic adviser Larry Kudlow said on Wednesday the sides aim to bridge differences during further talks. U.S. President Donald Trump said on Thursday the United States and China were getting very close to a trade deal that could be announced within four weeks, but he issued a warning to Beijing that, absent a pact, it would be difficult to allow trade to continue.
The refinery maintenance season is drawing to a close, which should boost demand for crude.
U.S. jobless claims hit 49-year low last week, pointing to sustained labour market strength despite slowing economic growth.
Still, U.S. crude’s turn to the negative demonstrated the market’s fears of weak demand and oversupply.
German industrial orders fell in February by the sharpest rate in more than two years, according to data released Thursday. Orders were hit by a slump in foreign demand, compounding worries that Europe’s largest economy had a weak start to the year.
Naphtha
Asia’s naphtha crack extended losses on Thursday, falling for a fourth straight session to reach a more than five-week low of $45.28 a tonne, dragged down by muted demand.
The April crack is lower at -$ 6.75 /bbl
Gasoline
The gasoline crack, however, clawed back losses from the previous session, climbing $6.67 a barrel, up from a 2-1/2 week low of $6.15 a barrel on Wednesday. Sentiment in the gasoline market was optimistic about supply and demand fundamentals, partly due to falling global inventory levels, particularly in the United States.
Light Distillate Stocks in Singapore rose by 244 kb to 15.88 million, as data from Enterprise Singapore showed.
The April crack has tanked to $ 6.60 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10ppm sulphur content were at a discount of 35 cents a barrel to Singapore quotes, the widest since Feb. 21. They were at a discount of 25 cents a barrel on Wednesday.
Singapore’s onshore inventories of middle distillates dropped by 463 kb to 10.93 million barrels in the week to April 3, data from Enterprise Singapore showed on Thursday.
Jet fuel cash discounts widened by 10 cents to 30 cents a barrel to Singapore quotes on Thursday, hurt by weaker deals in the physical market.
The jet-kerosene market in the region could also get temporary support as a fire at a Kuwait refinery earlier this week might curb exports from the country. Kuwait, however, said it had no concerns about fulfilling exports of kerosene and meeting domestic supplies after the fire shut down a kerosene unit at its Mina Abdullah refinery.
The April crack for 500 ppm Gasoil is higher at $ 11.90 /bbl with the 10 ppm crack at 12.85 / 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 mainstay 380-cst high-sulphur fuel oil widened on Thursday amid persistently weak deal values in the Singapore trading window for cargoes of the fuel.
Cash differentials for 380-cst high-sulphur fuel oil (HSFO) were at a discount of $1.46 a barrel to Singapore quotes, the widest since March last year. They were at a discount of $1.07 per tonne on Wednesday.
This came as onshore inventories in Singapore climbed to a three-week high amid ample arbitrage supplies over the past week. Fuel oil stocks in Singapore rose by 2.2 million barrels to 21.7 million barrels in the week to April 3, Enterprise Singapore data showed on Thursday.
The 380-cst balance-of-April/May time spread widened its contango structure to be at a discount of minus 75 cents a tonne, compared with minus 25 cents a tonne on Wednesday. The more actively-traded 380-cst barge crack to Brent crude for May edged higher to minus $4.74 a barrel during Asian trading hours as crude prices eased. The cracks were at minus $4.89 a barrel on Wednesday.
The April 180 cst crack has crashed to – $ 1.70 / bbl with the visco spread at $ 1.15 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
We have closed out a couple of FO crack positions today as the market seems to be crumbling under its own weight.
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.