Crude Oil
Oil prices inched up on Friday as strong U.S. economic data boosted demand sentiment. Brent crude futures settled at $70.85 a barrel, up 10 cents. WTI crude futures rose 13 cents to settle at $61.94 a barrel.
Brent shed 2.6% for the week, breaking a five-week winning streak. WTI crude futures lost about 3% percent during the week, its second straight weekly decline.
A U.S. jobs report that showed growth surging in April and the unemployment rate dropping to a more than 49-year low of 3.6% increased expectations that crude demand would stay strong. Equities rallied and the U.S. dollar weakened following the report, which also supported oil futures.
This morning though, prices are more than $ 1.50 down in the wake of an ultimatum by President Trump to China that they sign the deal by 10th May or face the consequences. China retaliated by saying they were considering canceling this week’s trade talks.
Activity in China’s services sector further improved in April, with export sales rising at a record pace. The Caixin/Markit services purchasing managers’ index (PMI) climbed to 54.5, the highest since January 2018 and slightly up from 54.4 in March.
Saudi Arabia has raised its crude oil prices for June to its Asian and European customers, and cut prices to the United States, a signal that Riyadh is in no hurry to boost oil supply ahead of an OPEC meeting next month.
Hedge funds and other money managers cut their bullish wagers on U.S. crude oil last week for the first time since February as prices fell on expectations supply would increase.
Naphtha
Asia’s naphtha crack rose about 3.4 percent to a two-session high of $41.15 a tonne on Friday, recovering from a 26% plunge to a 2-1/2-month low in the previous session amid ample supplies.
South Korea’s Hanwha Total bought more than 100,000 tonnes of heavy full range naphtha for second-half June arrival at Daesan, but this could not be directly confirmed. The spot premiums Hanwha Total paid were within $6 to $7 a tonne to Japan quotes on a cost-and-freight (C&F) basis level. These were higher versus the $5 to $6 a tonne premium Hanwha Total had paid on April 22 for similar volumes but first-half June delivery.
The May crack is higher at – $ 6.45 /bbl
Gasoline
No fresh news on the gasoline markets.
ARA onshore Gasoline stocks increased by 108 KT to 1.03 million tonnes on Thursday.
The May crack is higher at $ 6.75 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10ppm gasoil were at 25 cents a barrel to Singapore quotes on Friday, as against a discount of 28 cents per barrel a day earlier.
ARA gasoil inventories fell by 139 KT to 2.74 million tonnes in the week to 2nd May..
Jet cash differentials were at a discount of 9 cents a barrel on Thursday.
The May crack for 500 ppm Gasoil is higher at $ 13.25 /bbl with the 10 ppm crack at 13.90 / bbl. The regrade is lower at -$ 0.25 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash differentials of Asia’s 380-cst high-sulphur fuel oil (HSFO) extended losses on Friday amid weaker deal values in the Singapore window, dipping to their lowest in more than a week as plentiful prompt supplies and sluggish demand continue to weigh.
Cash discounts for 380-cst HSFO were at minus $1.63 a tonne to Singapore quotes, down from minus 93 cents per tonne on the previous session and minus 13 cents a tonne on Monday.
Fuel Oil stocks in ARA rose by 49 KT to 926 KT in the week to 2nd May.
The May 180 cst crack is weaker at – $ 3.15 / bbl with the visco spread at $ 1.70 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Cal-20 10 ppm gasoil has once again crossed $ 20.05/bbl. We shall hedge one tranche at this level.
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.