Crude Oil
Crude crude prices ended sharply higher yesterday as life returned to normal post Harvey. Brent futures rose by $ 1.04 to settle at $ 53.38/bbl., its highest close in several days. WTI settled up $ 1.37 at $ 48.66 /bbl, its highest close in 3 weeks.
While part of this rise is attributable to concerns about severe depletion of stocks, this does seem to be a bit of a boomerang effect. With stocks at prevailing levels, there need not be any panic about shortage of stock.
Further, along with the resumption of operations of many refineries, fears about gasoline shortages receded and gasoline prices slumped to close at $ 1.69 per gallon. These are pre-hurricane levels and around 22% lower that the $ 2.17 high seen on August 31.
API releases data for last week today. We do not expect this data to seriously move the market as it is the data at the end of this week which will reveal the impact of Harvey on refining.
Naphtha
Naphtha prices continued to ease in keeping with other product prices. Nevertheless, demand for the product remains firm with several buyers like Taiwan’s Formosa Corporation and China’s Unipec in the market for multiple cargoes. This firm buying is reflected in the paper crack.
The September Naphtha crack is valued a bit higher at $ 3.00 /bbl
Gasoline
Gasoline cracks too eased out in line with price action in the US. Yesterday’s settle was reported at $ 15.48, the lowest in 4 days. We expect this value to head further South in the coming days barring any unforeseen events.
The 92 RON crack for September is valued at $ 15.30 /bbl.
Distillates
Winson Oil continued to buy cargoes in the Platt’s window yesterday as well. It was joined by Unipec. This kept the cash premia for the product supported in the face of ample supplies.
The September gasoil crack is steady at $ 15.50 /bbl. The regrade has slipped to -$0.90 /bbl as demand for jet too appears to have receded.
Fuel Oil
The East West price differential in Fuel Oil prices has increased to make the arbitrage just about workable albeit a bit challenging notwithstanding low freight rates for VLCCs
The 180 cst crack is valued lower at -$1.65 / bbl for September. The visco continues to stay 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