Crude Oil prices continued to sruge further as tensions of trade wars receded further and the dollar weakened. Brent closed $2.39 /bbl higher at $71.04 /bbl while WTI gained $2.09 /bbl to settle at $65.51 /bbl.
In post settlement trading Brent touched $ 71.34 /bbl, a level not seen since December 2014. Yesterday’s gains were the largest single day gains since September. In the last two days, oil prices have gained more than 5%. The gain was helped by a really weak US dollar which fell to its lowest in two weeks.
Saudi Aramco may have shot itself in the foot by unexpectedly increasing the price of its crude oil to Asia, with a major Chinese refiner responding by sharply cutting back on the volume of cargoes from the world’s top exporter. China’s Sinopec, Asia’s largest refiner, plans to cut Saudi crude oil imports loading in May by 40 percent after national oil company Saudi Aramco set higher-than-expected prices, an official from the company’s trading arm Unipec said.
The API data reported a surprise build of 1.8 Million Barrels in crude. While it also reported a sizable build in gasoline of 2 million barrels where analysts had been expecting a small draw, it has also reported a draw of 3.8 million barrels in distillate stocks. However, this data is not likely to dampen the bullish sentiment which is based on geopolitical uncertainty, specifically, the future of Iran over the next couple of months.
The inter month spread for Naphtha continued at $ 13.75/MT for the third day in a row. While supplies remain tight, buyers appear to be increasing their purchase of the product this year as compared to previous years e.g. Hanwha Total has been purchasing 250 KT of Naphta per month this year as compared to 150 KT per month in 2017.
The balance April crack for Naphtha though continues to fall and is valued at – $ 1.20 /bbl. today. The May crack is valued at -$ 1.40 /bbl
Asia’s gasoline fell to $7.72 a barrel and was nearing a two-week low as ample supplies weighed, with the fuel being stored aboard ships off Europe and Singapore.
The balance April crack has has dropped to $ 10.35 /bbl . The May crack is at $ 11.05 /bbl
Asia’s cash differentials for gasoil with 10 ppm sulphur content fell on Tuesday, while the prompt month spread for the industrial fuel narrowed as traders were concerned refinery turnarounds in the region have not tightened supply as expected. The cash differential for 10 ppm gasoil fell to 26 cents a barrel to Singapore quotes, compared with 40 cents on Monday. The increase in commercial stockpiles of middle distillates in Singapore is also weighing on gasoil prices in the region.
In Europe, however, diesel cracks are hovering at some of the highest levels seen since the immediate aftermath of Hurricane Harvey last year.. Europe’s diesel exports rose to record volumes in September 2017 as Latin American buyers struggled to recover from a drop in U.S. supplies in the wake of Hurricane Harvey. Europe usually imports large volumes of the road fuel as the region’s refineries are unable to meet demand.
Meanwhile, cash differentials for jet fuel inched up to $1.02 a barrel to Singapore quotes on Tuesday, compared with $1 on Monday
The April gasoil crack is at $ 15.15 /bbl with the 10 ppm crack at $ 15.90 /bbl. The regrade is higher at $ 1.05 /bbl.
The May gasoil crack is at $ 15.20 /bbl with the 10 ppm crack at $ 15.85 /bbl. The regrade is unchanged at $ 0.55 /bbl.
The prompt-month viscosity spread slipped to about $13 a tonne on Tuesday after more than five sessions of sharp gains, fuel oil broker sources said. The balance-of-April viscosity spread on Monday settled at a near two-year high of $14 a tonne, up from $12.50 a tonne in the previous session and $9.50 a tonne at the start of the month. The return of Pakistan as a fuel oil buyer has also tightened the low viscosity pool.
The April 180 cst crack has plummeted to -$ 5.75/ bbl. The visco spread is at $ 2.15 /bbl
The May 180 cst crack is also at -$ 5.75/ bbl. with the visco spread unchanged at $ 1.90 /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.
Today’s status of active recommendations is below.
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.