Crude Oil
Crude oil futures continued their relentless march upwards posting gains for yet another day. Brent futures rose by 53 cents to settle at $ 54.89 / bbl while WTI gained 55 cents to settle at $ 51.70 /bbl.
The bulls have this market firmly in their grip as it ponders over the happenings of the next few months.For now, early this morning they have been given a fillip as news of the US firing missiles at Syria has propelled prices higher by over $ 1.00 / bbl
Naphtha
Naphtha stocks in the ARA region have dropped to 300.5 KT from 358 KT in the previous week which should be supportive.
Gasoline
Gasoline cracks have also eased in the prompt. However, the April crack strengthened to $ 12.6 /bbl.
Gasoline stocks in the ARA region have risen to 1,095 KT from 981 KT in the previous week. Light distillate stocks in Singapore have also risen by 259 KB to 14,445 KB, their highest levels this year and just a little bit short of last year’s record high stock levels at this time of the year.
Source : Bloomberg
Traders have been reported to have been booking ships in the ARA to move product to the US in a bid to reduce the overhand in Europe.
We therefore believe that upside in gasoline is likely to be limited.
Almost as if in corroboration of our beliefs, the May – June spread has receded further to 35 cents.
Middle Distillates
Middle distillates continue to stay steady with little change, if any, in crack values. Middle distillate stocks in Singapore drew mildly. However, they are still extremely high and just under last year’s levels
Source : Bloomberg
180 CST Fuel Oil
Singapore inventories reported a second consecutive large drop in stocks. There has been a flurry of trade activity over the last week. Imports rose by 146% to 1.2 million tons while exports rose to 559 KT, their highest level since December, 2015.
The draw essentially reflects a movement of cargoes into floating storage even though the price structure does not support it. This could be an outcome of the bullish trading play in process. Another 12 380 CST cargos were traded yesterday in the Platts window. An additional 4 cargos of 180 CST were also traded.
Over 1 million tons (roughly 6,500 KB) of 380 CST have been traded in the first week of April to date. This activity is highly unusual and should make us wary of the rise is crack prices of Fuel Oil
We would also like to point out that stock levels are virtually the same as last year’s levels and, had it not been for the play, they would have been higher than that.
Source : Bloomberg
The April crack is valued at -$ 3.35/bbl. May is valued at -$ 3.75 /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