Crude Oil
Oil prices rose on Thursday, helped by gains in U.S. equities markets and Saudi Arabia’s unexpected hike in crude prices. Brent futures settled 31 cents higher at at $68.33 /bbl. WTI futures rose 17 cents to to settle at $63.54/bbl.
Saudi Arabia said that it would increase its official selling price for May crude. This was taken by the market as a bullish move. The rationale being that if Saudi could effect all its exports at higher prices, the demand for crude was higher than expected. The market also looked on anxiously at missile firing by Yemeni rebels. However, gains were capped by a strengthening US Dollar.
Overnight, a statement by the US President, Donald Trump to consider additional tariffs on Chinese goods has rekindled the uncertainty in the markets which are currently trading just under $ 68.00 /bbl for Brent
Naphtha
The front month time spread (2H May – 2H June) rose to $ 13.50 / MT yesterday, a level not seen since April 2015. This is a reflection of the strong demand for physical product. Cash premiums are ranging between $ 13.50-15.00 / MT to CIF Japan quotes.
The strength in the physical markets notwithstanding, balance April crack for Naphtha has fallen further to – $ 0.35 /bbl.
Gasoline
Asia’s gasoline crack was steady on Thursday, settling just one cent lower than Wednesday at $ 8.16 /bbl.
Gasoline stocks in both Singapore and ARA were both reported lower than the previous week. However, they still continue to remain at their highest for the current time of the year.
This week, stocks of almost all commodities in Asia and ARA have drawn in consonance with turnarounds in the region.
The balance April crack has eased back to $ 11.00 /bbl .
Distillates
Asia’s jet fuel cash premiums fell on Thursday, ending six consecutive sessions of gains as onshore Singapore middle distillate stocks climbed to a 4-1/2 month high. Cash differentials for jet fuel slipped to $1.15 a barrel to Singapore quotes, from $1.25 on Wednesday.
The cash differential for gasoil with 10ppm sulphur content fell to 36 cents a barrel to Singapore quotes, compared with 39 cents on Wednesday. But the near-term fundamentals for the overall gasoil market, especially for the low sulphur variants, remain pretty tight.
Middle distillate stocks in Singapore rose by nearly 1.8 million barrels to 11.61 million barrels, a 4 and a half month high. Stocks in ARA however dipped by 71 KT.
The April gasoil crack has dropped to $ 15.70 /bbl with the 10 ppm crack at $ 15.45 /bbl. The regrade has improved to $ 0.90 /bbl.
Fuel Oil
Improved sentiment on Thursday helped Asia’s 380-cst market firm as buying interest boosted the prompt-month 380-cst time spread, recouping some of the losses from earlier in the week. Buying interest also helped firm the 380-cst fuel oil crack and cash premium on Thursday
Fuel Oil Stocks in both Singapore and ARA fell to below 5 year average levels on significant draws. Singapore stocks fell by nearly 2 million barrels to a 12 week low of 19.7 million barrels. ARA stocks fell by 222 kt to 839 KT.
The April 180 cst crack has strengthened to -$ 5.0/ bbl. However, cutter stocks are still tight and the visco spread has now moved to $ 2.00 /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.