Crude Oil
Oil prices continued to fall as market concerns about demand growth for oil continue to overshadow those about political unrest. Brent crude futures settled 87 cents lower at $58.94. WTI crude futures fell $ 1.06 to settle at $53.63 a barrel.
Brent prices are 22% lower than the peaks it scaled in April this year. Over the last week itself, it has lost 9%.
India has increased the cost estimate of a giant refinery and petrochemical project to be jointly built with Saudi Aramco and Abu Dhabi National Oil Co by more than 36%, after protests by farmers forced the relocation of the plant. The 1.2 million-barrels-per-day (bpd) coastal refinery in the western state of Maharashtra is now expected to be built at Roha in the Raigad district, about 100 km (62 miles) south of Mumbai. The new cost estimate of $60 billion for the refinery was given to Saudi Arabia’s energy minister Khalid al-Falih at a meeting with Indian Oil Minister Dharmendra Pradhan last month in New Delhi.
Naphtha
Asia’s naphtha crack extended losses on Tuesday to reach close to a six-week low of $22.78 a tonne, with buyers slow to purchase cargoes for delivery in the second half of September.
Kuwait is looking to sell a cargo for September delivery after higher-than-usual exports in August. It had sold a total of more than 150,000 tonnes for August loading, compared with 28,000 tonnes for June. There were no records of spot cargo sales in July.
India’s IOC was looking to export a cargo for August, bringing its total volumes for export this month to 97,000 tonnes, the highest monthly quantity since May 2015.
Overall, total naphtha flows to Asia this month are expected at up to 5.5 million tonnes, against 4.8 million tonnes in July.
The August crack is lower at -$ 6.20 /bbl
Gasoline
Asia’s gasoline crack was mostly unchanged at $5.87 a barrel.
The August crack is higher at $ 7.00 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10ppm gasoil were at a premium of 3 cents a barrel to Singapore quotes, compared with a narrow discount of 1 cent a barrel on Monday.
Cash differentials for jet fuel were at 15 cents a barrel to Singapore quotes on Tuesday, down from a 23 cent premium a day earlier.
The differentials, which owe their recent strength to a short-term tightness in supply, however, are expected to weaken as late summer travel demand slumps in the coming weeks and refiners ramp up production levels.
Asian refiners usually cut output during the second quarter for scheduled plant maintenance, while heavy demand for summer air travel provided a seasonal boost to the region’s already thriving aviation market.
The August/September time spread narrowed on Tuesday to trade at a premium of 8 cents a barrel, compared with 12 cents on Monday.
The August crack for 500 ppm Gasoil is lower at $ 15.55 /bbl with the 10 ppm crack at $ 16.45 / bbl. The regrade is at $ 0.10 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s high-sulphur fuel oil market complex extended losses on Tuesday, retreating from record highs posted last week due to supply constraints.
Cash premiums for 380-cst HSFO were near a one-month low of $13.67 a tonne to Singapore quotes, down from $16.40 per tonne in the previous session.
The front-month Sept/Oct 380-cst time-spread fell to a premium of about $22.50 per tonne on Tuesday, down from $26.75 a tonne in the previous session.
The August 180 cst crack has fallen further to – 0.95 / bbl with the visco spread at $ 1.30 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh recommendations for today
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.