Crude Oil
In the Asian morning, crude spiked as Saudi and a few other AG nations announced that they were cutting off ties with Qatar. However that spike was short lived as traders feared it could spark off some non compliance.
For now, the immediate impact is that none of these countries will accept a vessel with a Qatar flag, a Qatari owner or that has called / will call at Qatar before / after arriving at their ports. This means that such vessels will probably have to take on bunkers before hitting Fujairah. And it will not be possible to co-load Qatari crudes or products, thereby impacting crude economics perhaps.
For now, Brent still remains supported at $ 49.00 /bbl. And, as usual, traders will be looking out for API data today.
Naphtha
Naphtha cracks continue to be weak on ample supplies. Supplies from India were higher than expected whereas supplies from Europe were sharply higher. There were reports that issues affecting Qatar’s condensate splitters may have been resolved, but these have to be confirmed. For now, trades are being done at lower premia than were being quoted last week.
The June Japan Naphtha- Dubai crack is valued at -$1.0 /bbl.
Gasoline
Gasoline also cracks have eased a bit in Asia today. The June crack is valued at $11.40 /bbl in June.
We would maintain our stand of watchfulness going ahead and look for opportunities to hedge.
Distillates
Gasoil markets appear to be easing on visibility of ample supplies coming out of India notwithstanding the slew of turnarounds going on there. While there are many turn arounds, demand usually slumps in India with the onset of the monsoon for the next four months or so.
The June crack is valued at $ 10.0 /bbl. with the regrade at virtually flat.
Fuel Oil
Fuel Oil cracks continued to stay strong even though the market witnessed around 200 KT being traded in the Platts window yesterday. This is the largest volume traded since May 8 when 240 KT was traded. What is of note is that 5 parcels of 40KT each were traded as compared to the normal ticket size of 20KT. Trafigura was the buyer for all the cargos while Vitol and Petro China were the suppliers
The June 180 cst crack is valued at -$ 1.15 / bbl/ The visco spread has increased to $ 1.40 / bbl
We would recommend selling the July crack at around -$2.00 / 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.