Oil prices gained 1.5 percent on Friday as strong U.S. employment data tempered fears about weakening global crude oil demand. Brent futures settled at $70.34 a barrel, up 94 cents. WTI futures settled at $ 63.08 a barrel, up 98 cents.
Oil bulls are drawing heart from the strong employment data in the US and the signs of possible strife in Libya as additional stimuli to push prices higher. The U.S. Labor Department report showed employment growth accelerated from a 17-month low in March. Military action in Libya, which could disrupt supply from the OPEC member, also aided prices.
Hedge funds and other money managers raised their bullish wagers on U.S. crude as futures rose more than 4 percent in the latest week, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday, the speculator group raised its combined futures and options position in New York and London by 7,779 contracts to 250,989 during the week ended April 2.
U.S. energy companies this week increased the number of oil drilling rigs for first time in seven weeks. Companies added 15 oil rigs in the week to April 5 taking the number of active rigs to 831. While crude production has soared in the United States to a record 12.2 million barrels per day, according to government data released on Tuesday, some signs point to a near-term easing of growth.
U.S. and Chinese trade negotiators will continue talks next week by video conference as they try to reach a deal to resolve the trade war, White House adviser Larry Kudlow said on Friday.
Asia’s naphtha crack fell for the fifth straight session to a nearly 1-1/2 month low of $42.15 a tonne on Friday as high oil prices continued to weigh despite a stream of demand. There were at least four buyers this week seeking cargoes for second-half May delivery.
The April crack is higher at -$ 6.60 /bbl
Asia’s gasoline crack was at a two-session low of $6.42 a barrel. Inventories in Singapore and Europe were higher this week. Gasoline stocks held independently at the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub , to 1.06 million tonnes, , the data showed. Singapore’s onshore light distillates stocks was also higher..
Light Distillate Stocks in ARA edged up by 3 percent to a two-week high of 1.062 million tonnes in the week to Thursday, data from Dutch consultancy Insights Global, previously PJK International, showed. The current level was 22 percent lower versus a year ago.
The April crack is higher at $ 6.85 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash differentials for 10ppm gasoil narrowed their discounts to 32 cents a barrel to Singapore quotes on Friday. They were at a discount of 35 cents a barrel on Thursday, the widest in six weeks.
ARA onshore inventories of Gasoil rose by to 2.76 million tonnes in the week to April 4, data from Insights global showed on Thursday. This is the highest stock level since October, 2018.
Cash discounts for jet fuel were at 35 cents a barrel to Singapore quotes on Friday, compared with a discount of 30 cents per barrel a day earlier.
The physical jet fuel market in the Singapore trading window remained muted with no deals on Friday.
Demand from the region’s aviation sector, which has been pretty robust aided by continuing infrastructure investments and increased route options for travellers, has started showing signs of cooling off. Asia Pacific airlines’ passenger traffic rose 4.2 percent in February compared to the year-ago period, but substantially lower from a 7.2 percent increase in January.
The April crack for 500 ppm Gasoil is higher at $ 12.05 /bbl with the 10 ppm crack at 13.00 / bbl. The regrade is lower at $ 0.10 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Aggressive selling pressure for cargoes of 380-cst high-sulphur fuel oil (HSFO) in the Singapore trading window on Friday pushed cash discounts of the fuel to their widest levels in almost three years and dragging the prompt-month time spread to its widest contango structure in over a year.
Cash differentials for 380-cst HSFO were at a discount of $2.56 a barrel to Singapore quotes, the widest since June 2016. They were at a discount of $1.46 per tonne on Thursday.
The balance-of-April/May 380-cst time spread was at its widest since January 2018 at minus $2.25 per tonne, down from minus 75 cents per tonne on Thursday.
Ample arbitrage supplies and sluggish demand have weighed on market sentiment, pulling 380-cst cash differentials from premiums of about $3-$3.50 per tonne to Singapore quotes a month ago, and flipping the 380-cst prompt-month time spread from a backwardated structure to contango on March 27.
Meanwhile, official storage data released this week showed fuel oil inventories rose in the ARA hub rose by 95 KT to 931 KT.
The April 180 cst crack has crashed to – $ 2.25 / bbl with the visco spread at $ 1.35 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
The Cal-20 distillate cracks have once again risen. We shall reinstate positions past $ 20.00 /bbl
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.