Crude Oil prices fell sharply on Wednesday, ending their longest string of daily gains in more than five years as climbing OPEC exports and a stronger dollar spurred selling. Brent settled at $47.79 /bbl down $1.82 while WTI settled at $45.13 /bbl down $1.94.
Prices have managed to recover ever so slightly after API released its inventory data which showed U.S. crude inventories falling by 5.8 million barrels in the week to June 30 exceeding forecasts for a draw of 2.3 million barrels, At the time of writing this digest, Brent is trading at $48.00 /bbl (up 21 cents) and WTI is trading at $45.36 /bbl (up 23 cents).
Overall, the market continues to be weighed down by concerns of a supply glut. Adding to these apprehensions is the latest announcement from Russia stating that it would not support deepening oil production cuts.
Naphtha markets continue to remain weaken as a surplus availability is dragging down prices. Adding to the fears of a supply glut is the upcoming maintenance shutdown of the 1.2 million MMTPA cracker, owned by Asia’s top naphtha importer Formosa Petrochemical Corp.
The July crack for now is unchanged at -$1.15 /bbl
Gasoline cracks continue to rise buoyed by strong demand and falling inventories. Inventory data released by API yesterday showed gasoline inventories falling by 5.7 million barrels in the week to June 30. On the demand side, Pakistan is understood to be seeking four cargoes of 50,000 tonnes each of 92-octane gasoline for September delivery.
The July crack is stronger at $ 10.45 /bbl
The Distillate market especially gasoil continues to strengthen on the back of robust demand in Asia, particularly India. This surge in demand has created a rare arbitrage that reverses traditional routes. Oil traders are shipping diesel out of Europe to Asia and the Middle East as opposed to moving cargoes from East to the West. At least three 90,000 tonne diesel cargoes were booked in recent days out of northwest Europe with options to go to Singapore and the Middle East.
The July crack is stronger at $ 13.45 /bbl. Demand for Jet is not as strong as that for gasoil which is reflected in the the July regrade being valued at -$ 1.35/bbl
Fuel Oil cracks managed to improve marginally amidst market talk that Fuel Oil supplies in the East for the months of July and August are expected to be significantly lower than the fuel oil received in the month of June.
The July crack is valued at -$0.60 / bbl. 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.