Crude Oil
Crude Oil prices finished the day yesterday largely unchanged albeit slightly lower. Brent rallied at $52.37 /bbl, down 5 cents on the day. WTI settled at $49.39 /bbl, down 19 cents.
Crude Oil prices dipped at the start of both the London and New York trading sessions in reaction to news that Libya’s production had recovered to its normal levels after a brief disruption by armed forces. Brent made a low of $51.38 before buying emerged. This buying has been attributed to algorithmic trading.
Naphtha
Although the Naphtha crack has eased in the prompt, traders expect the market to be supported at these levels as demand is soaking up the excess supply in Asia and fewer cargoes are moving from the West to the East. A total volume of 5.07 million tons of naphtha arrived at Singapore in July. This is the lowest level of monthly supply for this year and 7% below the average supplies of Naphtha in 2016.
The August crack is lower at $0.85/bbl today.
Gasoline
The physical Gasoline crack continues to strengthen as the shut down of the Pernis refinery in Europe has led to Shell buying several barges of gasoline to make up for the production deficit . The refinery shutdown is expected to continue at least till mid August.
The August crack is valued higher at $ 13.30 /bbl.
Distillates
Distillate cracks have eased as moving cargoes from the East to Europe has become nonviable due to higher freight rates plying the intercontinental route. Several vessels provisionally booked to ship distillates from the Middle East to Europe are heard to have failed. Adding further pressure is a slowdown in demand from India due to the monsoon season. Before the monsoons set in, India was importing large quantities of low sulphur gasoil as several of its refineries were yet to return from turnaround.
The August gasoil is valued at $ 12.55 /bbl. For the first time since 6 June, the regrade is at -$0.00 / bbl.
Fuel Oil
The Fuel Oil cracks have strengthened in the prompt. However, the market sees supplies as more than adequate.
In other news, Shell is considering expanding the capacity of one of its German refineries to make oil products that meet an upcoming cap on the sulphur content of fuels used in shipping. The International Maritime Organization, the United Nations’ shipping agency, set global regulations in late 2016 to cap sulphur content in shipping fuel at 0.5 %, versus the current 3.5 %, from 2020.
The 180 cst August crack is at -$1.95 / bbl. The visco spread is at $0.50 /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