Crude continued to strengthen with market hopeful of the supply glut easing with OPEC extending production cuts. Brent increased by $ 0.55/bbl to settle at $50.77/bbl while WTI increased by $0.50 /bbl settle at $ 47.83/bbl.
The recent price increase notwithstanding, the market is still wary of a steep drop in oil prices as evidenced by increased number of put options being purchased by various traders.
In other news, it is being heard that Russian state oil firm Rosneft is struggling to close its $12.9 billion acquisition of India’s Essar Oil Ltd (EOL) because six of EOL’s Indian creditors have yet to approve the deal. Kremlin-controlled Rosneft, which sees the deal as vital to expanding in Asia’s fastest growing energy market, had aimed to close the deal at the end of 2016. Now a June target for completion may be in doubt.
Firm demand from North Asia helped prop up the naphtha market which hitherto has been struggling with excess supplies and lukewarm demand. Report of Formosa (Asia’s top naphtha importer) having to cut runs at its 540,000 bbls/day Mailiao refinery due technical issues at one of its three crude units also helped to support prices. The refinery will need to shut the 180,000 bpd CDU for repairs at some point, but the timeframe has not been fixed. Amongst others in the market seeking naphtha were Chinese buyers CNOOC and Unipec.
The Singapore May Naphtha – Dubai crack is valued at -$ 1.70 /bbl and the June crack is at -$ 2.55 /bbl. The May Japan Naphtha- Dubai crack is at -$0.45
The Gasoline market continued to strengthen on the back of falling inventories both in Singapore and the US. The Singapore light distillate stocks fell 8.4 percent, or 1.113 million barrels, to reach a 4-1/2 month low of 12.2 million barrels in the week to May 10.
The Singapore crack for May is valued at $ 11.80 /bbl and the June crack is at $10.90 /bbl
The gasoil market continues to remain strong supported by spot demand from India and a drawdown in inventories in Singapore and Fujairah. Yesterday India’s IOC was seeking EURO IV Gasoil and it is reported that HPCL too is looking to buy gasoil. The shortfall appears to have been caused as a result of the planned maintenance of the HMEL refinery (180 kbpd) at Bathinda. Singapore onshore gasoil and jet fuel stocks slipped by nearly 2 percent to a three-week low of 11.513 million barrels in the week to May 10. Singapore shipped more diesel to Australia, Vietnam and Hong Kong last week compared with the previous week and imported less of the fuel from India, South Korea and Malaysia, which contributed to the drawdown in inventory.
The May Gasoil crack is unchanged at $ 10.65 / bbl whilst the June crack is also steady at $10.10/bbl. The May regrade however fell to -$0.75 as gasoil is trading stronger than Jet.
Fuel oil strengthened on the back of bullish Singapore inventory numbers which showed that onshore fuel oil inventories fell 15%, or 540,000 tonnes, to their lowest since 4th Jan 2017 at a total of 2.97 million tonnes in the week to May 10.
The May 180cst-Dubai crack is now at -$ 2.05 / bbl and the June crack is valued at -$2.80. The May Visco spread unchanged at $1.35/bbl.
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.