Brent Crude ended up lower on US Labor Day holiday. The front month future eased by 41 cents to settle at $ 52.34/bbl.
Since the NYMEX was shut, no settle was recorded for WTI. However, WTI prices were being reported higher as more refineries resumed operations. As of Monday afternoon, 2.1 mb/d of refining capacity was still reported as shut by the US Department of Energy. This would mean that approximately 50% of the shut in refining capacity has commenced resumption of operations.
This has had a twofold effect. First of all gasoline prices have collapsed to pre Harvey levels. Secondly crude prices have started rising as demand for crude will rise.
The fall in Brent prices is being partly attributed to a reaction to the Korean nuclear bomb test as investor money retreated to the safe haven of gold.
The Naphtha cracks have eased slightly as more supplies are coming in to the market to offset spot demand. Among the prominent buyers looking for naphtha cargoes is China’s CNOOC who is seeking 80,000 mt October arrival at Huizhou.
The September Naphtha crack is valued lower at $ 2.90 /bbl
With the Pipelines and refineries impacted by Harvey slowly getting back onstream, gasoline cracks are beginning to recede from their peaks. Interestingly in Platts Asian Trading Window, a total of 500,000 bbls was traded which is the highest volume in a single session since 23 June earlier this year.
The 92 RON crack for September is valued at $ 16.30 /bbl. We reiterate our earlier recommendations to hedge gasoline cracks while they are still at these high numbers.
Distillate cracks have strengthened further as traders commence shipment of distillates to Latin American countries to meet a shortfall in demand there. Also, a possible trading play by Oil trader Winson Oil which bought a staggering 10 of the 11 gasoil cargoes that traded in the Platts’ window in Singapore on Monday, which totalled 1.5 million barrels propped up the market.
The September gasoil crack is higher at $ 15.50 /bbl. The regrade has slipped to -$0.70 /bbl.
Fuel Oil cracks have lost ground as high inventories in key hubs of Amsterdam-Rotterdam-Antwerp (ARA) and Singapore pressured prices. A total of 10 cargo trades of 380 cst fuel oil totaling 205,000 mt were reported in the Platts window.
The 180 cst crack is valued lower at -$1.35 / bbl for September. The visco spread is unchanged at $ 0.85 /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.
Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity