Oil futures continued their frenzied march upwards on the uncertainty about sanctions on Iran. Brent futures gained another $1.30 to settle at $76.17 /bbl while U.S. crude futures gained $1.01 to settle at $ 70.73 /bbl.
However, Oil prices retreated this morning after President Trump said he will make his decision known at 1800 GMT today. Sanctions could immediately affect Iran’s export to the tune of 200-300 kb / day.
Asia’s naphtha crack hit $97.63 /MT on Monday, the highest since Jan. 10 buoyed by tighter supplies. Cargoes arriving from the West including Europe and the Mediterranean in Asia next month were expected to fall below May’s arrival volumes estimated at some 1.3 million tonnes.
The crack for balance May is has improved to -$ 0.30 / bbl.
Asia’s gasoline crack dropped back on Monday to settle at $6.40 /bbl, the lowest in over a week. Taiwan’s CPC has resumed spot sales after an absence of about three months as production was affected by an explosion in its Talin refinery in March and a scheduled maintenance at a gasoline-making unit at its Taoyuan refinery.
The balance May crack has is now at $ 9.20 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s cash differentials for 10ppm gasoil edged higher on Monday, helped by firmer demand and tighter supply. Cash premiums for gasoil with 10 ppm sulphur content climbed a cent to 43 cents /bbl to Singapore quotes on Monday. The market is not expecting very high Chinese diesel exports soon and Indian shipments of the industrial fuel are also expected to stay low until June.
Meanwhile, cash premiums for jet fuel were unchanged at $1.01 /bbl to Singapore quotes on Monday. Currently, Asian jet fuel buyers are paying the highest premiums for this time of year in ten years as new and expanded airports in the region push its consumption to new highs.
The balance May crack has improved to $ 15.10 / bbl with the 10 ppm crack quoting at $ 15.85/bbl. The regrade is valued at $ 0.40 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Despite crude oil prices climbing to fresh highs on Monday, Asia’s front-month high-sulphur fuel oil crack narrowed its discount to Brent crude. The June 380-cst fuel oil crack to Brent crude was trading at a discount of about $12.70/bbl Rising seasonal demand as well as lower output from key producers amid scheduled refinery maintenance could be lending support to the fuel oil market in the near-term.
The May 180 cst crack is marginally better at -$ 6.20 / bbl. The visco spread is steady $ 1.50/bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
We do not see any fresh positions that we would consider hedging today. However, we could consider hedging 10 ppm gasoil should it cross $ 71/bbl in 2018. The current status of active hedges is above.
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.