Crude Oil
Oil prices rose up to 2 percent on Monday as investors continue to fear the impact of disruptive forces. Brent futures rose 76 cents to settle at $71.10 a barrel. WTI futures gained $ 1.32 to settle at $ 64.40 a barrel.
Investors already were focused on supply during the session as fighting in oil-rich Libya threatened to disrupt exports. Eastern forces were advancing on the country’s capital, disregarding global appeals for a truce.
Despite the factors boosting prices, there are still factors that could bring oil prices down later this year. Russia is a reluctant participant in its agreement with OPEC, and Kirill Dmitriev, the head of Russia’s direct investment fund, signaled on Monday that Russia wanted to raise oil output when it meets with OPEC in June. He added that it could be appropriate for Russia to increase output by 228,000 bpd, by which it had previously cut production, “and maybe even further.”
U.S. officials remain unsatisfied about all the issues standing in the way of a deal to end the U.S.-China trade war but made progress in talks with China last week. U.S. officials are pressing China to make changes to address longstanding concerns over industrial subsidies, technology transfer and intellectual property rights.
Naphtha
Asia’s naphtha crack extended losses for the sixth straight session to $41.98 a tonne on Monday, its lowest since Feb. 25 as high oil prices and a fire at a Taiwanese chemical plant weighed, countering demand from South Korea and Japan.
South Korea’s Lotte Chemical, Hanwha Total and Japan’s Mitsubishi Chemical were seeking naphtha for second-half May delivery. Mitsubishi Chemical had paid a slight premium to Japan quotes on a cost-and-freight (C&G) basis for the fuel but this was pegged to a 45-day price formula instead of the usual 30 days. Lotte Chemical had paid premiums within a range of $3.25 to $4.50 a tonne above Japan quotes on a C&F basis for cargoes to be delivered to Yeosu and Daesan.
The April crack has dropped to -$ 7.30 /bbl
Gasoline
No fresh news on the gasoline markets today
The April crack is steady at $ 6.85 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10ppm gasoil reduced their discount to Singapore quotes to 26 cents a barrel, compared with a 32 cents discount on Friday.
The April/May time spread for gasoil with 10ppm sulphur content narrowed its contango to be at a discount of 41 cents a barrel, against a discount of 44 cents on Friday.
Cash discounts for jet fuel were at 28 cents a barrel to Singapore quotes, compared with a discount of 35 cents per barrel on Friday.
The April crack for 500 ppm Gasoil is higher at $ 12.20 /bbl with the 10 ppm crack at 13.15 / bbl. The regrade is lower at $ 0.05 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The prompt-month 380-cst time spread extended losses, broadening its contango structure to its widest in more than two years on Monday as ample near term supplies and sluggish demand continue to weigh.
The balance-of-April/May 380-cst time spread was at its widest since February 2017 at minus $2.50 per tonne, down from minus $2.25 per tonne on Friday.
Cash differentials for 380-cst HSFO, however, halted sharp declines seen in the previous week, narrowing its discount by 8 cents from Friday to $2.48 a barrel to Singapore quotes on Monday.
The April 180 cst crack has improved to – $ 1.70 / bbl with the visco spread at $ 1.35 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
The Cal-20 distillate cracks have once again risen past $ 20 / bbl. We shall reinstate cal 20 Jet Dubai crack at $ 20.05 /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.