Friday’s price action may be described as a typical Friday session after a huge drop. Traders were basically covering their short positions over the weekend. As of now, there is not much bullish cheer left in the market other than jawboning and hoping for a better driving season. As another reporter put it, “Oil Prices fell because the investors are no longer pleased with the current output cuts by the OPEC”
This morning prices are up after Macron’s victory in the French Presidential election. This is viewed as supportive for oil prices as it raised hopes of a more stable Europe.
Crude seems to have bounced off the 38.2 % retracement line from 16-Jan-16 low of $27.10 to the $58.31 high of January this year. The way it took out all the supports suggested by our technical analysis last week, suggests that the momentum is not yet done and we could see further selling next week, particularly if any fresh data is neutral. While the MACD is firmly in oversold territory in the daily charts, it is in fact a littlee bit above neutral in the weekly chart.
Supports seem to be at $ 46.60 and $ 45.50 below. Resistances appear to be at $ 49.50, $ 50.3 and $51.4 above.
While the drop in crude prices bolstered the Naphtha crack, its impact was muted by a huge rise in Naphtha stocks in the ARA region. Stocks were up 38% week on week but 152% over the previous year.
The Japan Naphtha – Dubai crack for May dropped to – $ 0.10 /bbl. The Singapore Naphtha – Dubai is around -$ 1.5 /bbl.
Gasoline stocks in the ARA region rose by 1.7% week on week. Stocks in the US are also rising and hence expected to be dampening gasoline cracks.
The Singapore crack for May is valued at $ 10.05 /bbl. which is a $0.35/bbl increase from yesterday
The May crack is valued at $ 10.10 / bbl, higher by around 40 cents from Friday.
This is notwithstanding an 8% jump in ARA stocks week on week and the anticipated restart of a KPC CDU this week. In these times of volatile crude prices, we may often see the cracks jumping around a bit without any seeming support from fundamentals.
The regrade is flat in the prompt -$ 0.30 / bbl for May. The June regrade has weakened to +$0.35/bbl
180 CST Fuel Oil
Fuel Oil cracks are stable to marginally weaker today as supplies were seen to be easing in June. However, high freight rates may well make the arbitrage from the west unworkable. The May 180cst-Dubai crack is valued at -$ 2.0 / bbl. The June crack is a -$ 3.0 /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.