Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil put in a second week of gains as crude prices reentered range-bound trading on Friday on concerns about slowing U.S. jobs growth and the Covid situation in No. 3 energy consuming nation India.

Brent crude futures did a final trade of $68.23 before the weekend, after settling Friday’s session at $68.28, up 19 cents, or 0.3%, on the day. Brent hit an eight-week high of $69.94 on Wednesday, before losing its upward momentum. For the week, it ended up 1.5%.

WTI crude did a final trade of $64.84 per barrel before the weekend after settling Friday’s trade up 19 cents, or 0.3%, at $64.90. WTI hit an eight-week high of $66.75 on Wednesday, before snapping a four-day rally. For the week, it showed a 2% gain.

Top U.S. fuel pipeline operator Colonial Pipeline shut its entire network, the source of nearly half of the U.S. East Coast’s fuel supply, after a cyber attack on Friday that involved ransomware. Colonial transports 2.5 million barrels per day of gasoline, and other fuels through 5,500 miles (8,850 km) of pipelines linking refiners on the Gulf Coast to the eastern and southern United States. It also serves some of the country’s largest airports, including Atlanta’s Hartsfield Jackson Airport, the world’s busiest by passenger traffic.

However, with no physical damage to the pipeline and sufficient inventories, the bullish impact on East Coast fuel prices is likely to be transient. Having said that, declining inventories across commodities create risks of greater price impacts of such future potential disruptions.

China’s crude oil imports in April fell 0.2% from a year earlier as refiners curbed production to relieve a squeeze in profit margins brought about by rising crude oil prices and bulging inventories. The world’s biggest crude oil buyer brought in 40.36 million tonnes of crude oil in April, or 9.82 million barrels per day (bpd), data from the General Administration of Customs showed. That was the lowest since December and was down from 11.69 million bpd of imports in March.

US energy firms added 2 oil rigs to total 344 (+52 YoY), according to Baker Hughes, as higher oil prices prompted some drillers to return to the wellpad.

Money managers raised their net long US crude futures and options positions by 13,874 contracts to total 401,268 in the week to 4 May’21, the US CFTC said on Friday.

At a global level, the death toll from the COVID-19 virus rose to 3.31 Million (+9,929 DoD) yesterday. The total number of active cases rose fell by around 110,000 DoD to 18.27 million. (Click here for details).

Asia’s naphtha crack was little changed on Friday, slipping 43 cents a tonne from the previous session to $97.05 a tonne. The naphtha crack was at $93.90 a tonne on Monday.

Naphtha cracks have been supported by a lower near-term supply outlook as the prices in the East-West arbitrage window appeared to close amid tight European supplies. The front-month East-West spread jumped to $13 a tonne on Friday, up $1.50 from the previous session and away from a near a two-month low of $10.50 a tonne last week, Refinitiv Eikon data showed.

The June crack is lower at $ 0.40 /bbl

Asia’s gasoline slipped on Friday and ended the week lower with industry participants weighing signs of improved demand as the summer season approaches against concerns over rising COVID-19 infections in India and elsewhere.

The gasoline crack in Singapore fell to $6.33 per barrel on Friday, down from $6.75 per barrel in the previous session and $6.51 a barrel on Monday.

The June crack is higher at $9.20 /bbl

Click Here for a graphical depiction of Global Gasoline stocks by region.

Asia’s cash differentials for gasoil with 10 ppm sulphur were at a discount of 10 cents per barrel to Singapore quotes on Friday, while the May/June time spread for the benchmark gasoil grade traded at a narrow contango of minus 1 cent a barrel.

Cash differentials for jet fuel eased by two cents to a premium of 12 cents a barrel to Singapore quotes on Friday.

Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub slipped 0.8% to 2.2 million tonnes in the week ended May 6, data from Dutch consultancy Insights Global showed.

The June crack for 500 ppm Gasoil is higher at $6.75 /bbl with the 10 ppm crack at $ 8.05 /bbl. The regrade is at -$ 0.40 /bbl. 

Click Here for a graphical depiction of Global Distillate stocks by region.

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) time spread and crack pared back some losses this week but ended the week lower as ample prompt supplies weighed.

The prompt-month time spread was up 50 cents a tonne to minus $1 a tonne on Friday, while the front-month crack versus Dubai crude was at $12.49 a barrel, up 81 cents from Thursday.

Fuel oil stocks in the ARA refining and storage fell 7%, or 105,000 tonnes, to a three-month low of 1.428 million tonnes in the week ended May 6, data from Dutch consultancy Insights Global (IG) showed.

The June crack for 180 cst FO is lower at  -$4.80 /bbl with the visco spread at $0.85 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

No fresh action today. 

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 refinery.

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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

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