Crude crude prices continued to climb steadily in a new wave of bullish sentiment. Brent futures rose by $ 0.82 to settle at $ 54.20/bbl., its highest close in several days. WTI settled up $ 0.50 at $ 49.16 /bbl.
The market is anticipating strong demand for crude for the restarting refineries and regeneration of stocks that have been depleted during the shutdown. The market is also watching Hurricane Irma warily as it heads towards Florida around the weekend. The fear is that it could impact a major demand centre i.e. the West Coast as well as knock a few refineries out of kilter.
All said and done, the medium term outlook is for ample oil supplies as crude output remains high in the US, Russia as well as the Middle East.
In other news, the Libyan, 280 Kbpd, Shahara oil field has resumed operations following lifting of a pipeline blockade.
The API, in its weekly report yesterday, stated that Crude Oil stocks rose by 2.79 million barrels. Gasoline stocks drew by 2.54 million barrels while distillates drew by 600 KB. Refinery rates plunged to 83.9% as refineries were shutting down in preparation for Harvey.
The crude build was less than market expectations of a 4 million barrel build. Having said that, the gasoline draw too was much less than market expectations of a 5 million barrel draw.
As we had mentioned earlier, this data is not likely to have much impact on the markets unless the EIA comes up with a set of seriously different numbers tonight.
Naphtha cracks rose to a 6 and a half month high of over $ 95 / ton on very strong demand.
The September Naphtha crack is valued slightly lower at $ 2.95 /bbl
Gasoline cracks continued to ease as yesterday reported crack settle was $ 14.76. We are not too sure of how much lower the crack may head immediately. However, our expectation is that it will ease out further over the next month. Having said the above, we don’t fine the October crack levels particularly attractive currently.
The 92 RON crack for September is valued at $ 14.70 /bbl.
Winson Oil continued to be an active buyer in the Platt’s window yesterday as 2.35 million barrels of product was traded. Supply appears to be ample while demand appears to be tapering off. About 8-9 vessels booked provisionally to load 880 KT of Gasoil and Jet along with Gasoline, out of a total of 25, have been cancelled.
The September gasoil crack is stronger at $ 15.65 /bbl. The regrade has slipped to -$0.95 /bbl as the jet crack has not changed
A trading play seems apparent in the Platts window as cash differentials for both 180 cst and 380 cst jumped by 25-30 cents. While the 380 cst prices were already at premiums, the 180 cst prices flipped from a discount of 13 cents to a premium of 17 cents.
The 180 cst crack is valued at -$1.30 / bbl for September. The visco has reduced t0 $ 0.75 /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