Crude Oil
Oil prices ended the day slightly higher as markets still appear undecided about the effects of the US action. Brent futures rose 26 cents to settle at $ 77.47 /bbl while U.S. crude futures gained 22 cents to settle at $ 71.36 /bbl.
Observers of intra-day price action would have noticed the strong uptick in the last 45 minutes of trading which, in the absence of any fresh news seems like algo trading.
In the meanwhile, the IEA has said that higher oil prices may not be good for major producers in the medium- to long-term as consumers will seek alternatives to refined oil products in energy and passenger cars, leading to lower oil demand.
Naphtha
Asia’s naphtha crack extended gains for the sixth straight session to hit a near 4-1/2 month high on Thursday at $106.03 /MT as supplies were squeezed while demand stayed firm.
The crack for balance May has once again returned to negative territory at -$ 0.10 / bbl. The June crack is still at – $ 0.15 / bbl
Gasoline
Asia’s gasoline crack, at $7.17 /bbl, was at its highest since April 30 as a sharper-than-expected drawdown in gasoline stocks in key market United States could have given some support.
Stocks in Singapore, however, rose by 797 kb to 13.31 million barrels, rising above last years levels after a brief dip in the last few weeks.
The balance May crack has jumped to $ 10.65 / bbl. The June crack is at $ 11.15 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash differentials for 10ppm gasoil edged higher on steady demand and as middle-distillate inventories in Singapore slumped to their lowest in more than three years. Cash premiums for gasoil with 10 ppm sulphur content inched up to 46 cents a barrel to Singapore quotes, from 45 cents a barrel on Wednesday. Meanwhile, cash premiums for jet fuel dipped to 34 cents a barrel to Singapore quotes, compared with 42 cents a barrel on Wednesday. The overall middle distillate markets may come under pressure once the refineries in seasonal maintenance start coming back.
Middle distillate inventories in Singapore dropped by a further 691 kb to 7.36 million barrels. This is the lowest level seen in 2018 and around 35% lower than 2017 levels
The balance May crack is slightly lower at $ 15.00 / bbl with the 10 ppm crack quoting at $ 15.75/bbl. The regrade is higher at $ 0.35 /bbl
The June crack has also dropped to $ 15.05 / bbl with the 10 ppm crack quoting at $ 15.85 /bbl. The regrade is higher at $ 0.65 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The front-month fuel oil crack continued to find support on Thursday despite further gains in crude oil prices. The June 380-cst fuel oil crack to Brent crude was trading at a discount of about $12.40 /bblwhile Brent was at $77.53 a barrel. On Wednesday, the June crack was trading at about $12.50 /bbl.
Meanwhile, the June viscosity spread fell for a sixth session straight to a five-week low of $9 a tonne. The availability of cutter stocks used to blend down the ample supplies of high-viscosity, high-density fuel oil in Singapore was gradually improving but the imbalance had not yet normalised.
Singapore weekly onshore fuel oil inventories rose by 1.396 million barrels to a 4 week high of 19.13 million barrels. However, stocks are still at their lowest level for this time of the year. Having said that, they are just 4% lower than last year’s levels.
The May 180 cst crack has improved to -$ 5.70 / bbl. The visco spread has come in to $ 1.40/bbl.
The June 180 cst crack is at -$ 5.30 / bbl. The visco spread is at $ 1.50/bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh comments here.
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.