Oil prices settled higher Friday, but slipped to another weakly defeat after countries agreed to release millions of barrels from their emergency reserves offsetting signs of falling Russia output in early April as sanctions bite.
Brent crude futures settled up $2.20, or 2.19%, at $102.78 a barrel. WTI crude futures rose $2.23 to $98.26.
For the week, Brent dropped 1.5% while WTI slid 1%. For several weeks, the benchmarks have been at their most volatile since June 2020.
Trading was choppy all day and the contracts spiked higher just before settlement as traders covered short positions ahead of the weekend, said John Kilduff, a partner at Again Capital LLC.
While Russia has found Asian buyers, Western buyers are shunning cargoes since the start of the conflict in Ukraine. The Kremlin on Friday said Russia’s “special operation” in Ukraine could end in the “foreseeable future.”
Russia’s production of oil and gas condensate fell to 10.52 million barrels per day (bpd) for April 1-6 from a March average of 11.01 million bpd, two sources familiar with the data told Reuters on Thursday.
U.S. producers added 13 oil rigs in the week to April 8, data from oil services firm Baker Hughes showed, a third straight week of gains. The total number of active oil rigs is now 546, the highest since April 2020.
Money managers cut their net long U.S. crude futures and options positions in the week to April 5 by 3,147 contracts to 266,727, the U.S. Commodity Futures Trading Commission (CFTC) said.
At a global level, the death toll from the COVID-19 virus rose to 6.20 Million (+1,686 DoD) yesterday. The total number of active cases fell by 20,000 DoD to 44.57 million. Over the weekend, the website has recalibrated data. (Click here for details).
Asia’s gasoline and naphtha refining profit margins posted weekly gains of over 14% after a series of trades at the Singapore window lifted market sentiment.
Asia’s naphtha margin climbed to $131.40 a tonne, up $14.85 from Thursday.
The May crack is higher at $ 3.50 per barrel
Asia’s gasoline crack rose to $16.57 a barrel on Friday, up 3 cents from the last close, while the naphtha margin climbed to $131.40 a tonne, up $14.85 from Thursday.
Meanwhile, gasoline stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage area dropped almost 8% to 1.274 million tonnes in the week to Thursday, data from Dutch consultancy Insights Global showed. Naphtha stocks declined to 266,000 tonnes last week from 278,000 in the prior week.
The May crack is higher at $19.85 per barrel.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asian refining margins for 10 ppm gasoil held above $30 a barrel on Friday, posting a weekly gain, as firmer demand from the West kept the regional market tight in supplies.
Cash premiums for gasoil with 10 ppm sulphur content slipped to $7.35 a barrel to Singapore quotes on Friday, down from Thursday’s $8.68 a barrel that was a record high, according to Reuters data going back to late 2011.
Refining margins, also known as cracks, for 10 ppm gasoil were at $30.31 a barrel over Dubai crude during Asian trading hours, compared with $31.30 per barrel a day earlier.
“Total March-loading exports were assessed at a six-month high of 8.59 million tonnes as the ongoing Russia-Ukraine conflict continued to tighten the Northwest European market, drawing barrels out of Asia. We expect more East Asian cargoes to head West if the conflict is protracted, with the prospect of increased sanctions on Russia likely to complicate the flow of oil in Northwest Europe further.” Zameer Yusof, senior analyst at Refinitiv Oil Research, said in a note.
Cracks for the benchmark gasoil grade in Singapore have climbed about 15% this week, and were currently 181% higher than their five-year seasonal average for this time of the year, Refinitiv Eikon data showed.
Singapore’s middle distillate inventories have plunged to their lowest in more than eight years this week, as the biggest exports of automotive diesel went to Netherlands at around 35,400 tonnes.
Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp refining and storage hub STK-GO-ARA dropped 6.2% to 1.5 million tonnes in the week ended April 7, according to Dutch consultancy Insights Global. ARA jet fuel inventories fell 1.1% this week to 947,000 tonnes.
Gasoil stocks this week have slid to their lowest level since April 2014.
The May crack for 500 ppm Gasoil is lower at $30.40 /bbl with the 10 ppm crack at $31.45 /bbl. The regrade is at -$3.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s cash premiums for 180-cst high-sulphur fuel oil (HSFO) climbed on Friday, surging to their highest level in nearly 2-1/2 years, partly lifted by firming summer demand from South Asian utilities. The cash differentials for 180-cst HSFO soared to a premium of $32.76 per tonne to Singapore quotes, a level last seen in early November 2019. They were at a premium of $28.48 per tonne a day earlier.
Meanwhile, the cash differentials for 380-cst HSFO were at a premium of $21.53 per tonne to Singapore quotes on Friday, compared with $20.81 per tonne a day earlier.
The front-month barge crack for 380-cst HSFO traded at a discount of $10.89 a barrel to Brent on Friday, compared with minus $11.07 a barrel on Thursday.
Meanwhile, the front-month VLSFO crack rose to $23.16 per barrel against Dubai crude during Asian trading hours, compared with $21.66 per barrel on Thursday.
Cash premiums for Asia’s 0.5% VLSFO climbed to $22.28 a tonne to Singapore quotes on Friday, up from $21.49 per tonne on Thursday.
Fuel oil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub slipped 0.9% to 865,000 tonnes in the week to April 7, data from Dutch consultancy Insights Global showed.
The May crack for 180 cst FO is lower at $4.70 /bbl with the visco spread at $5.65 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
We shall hedge a tranche each of 92 Unleaded – Dubai for Jun – 22 and 3Q22 at current levels of $18.55 and $15.75 per barrel.
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.
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.