The drop showed in outstanding futures positions as reported by CFTC. Speculators cut positions in WTI futures to 508,500 lots from 525,300 lots a week before. In the meanwhile, the impending fall did not appear to have fazed US producers from adding 8 more rigs to bring the total rigs outstanding to 617.
Crude Oil futures broke through several key support levels in the last week. The multi bottom support of 54.75 was simply shattered out of existence. Crude prices have retraced more than 76.4% of their climb
from end November. Supports for now seem to be at 50.75 levels followed by 48.90 below. Resistances would be at 51.6 and 53.0 above. On the weekly charts, supports show up at 51.25 (50 WMA) and 49.60. However, at the time of writing, Brent is already trading close to 51.00, therefore this support seems to be being challenged.
The Naphtha physical crack recovered to much better levels as crude prices dropped. However, supplies for April appear to be more than adequate as the product is selling for discount to marker quotes. The MOPJ crack for both March and April is valued at $ 1.0 / bbl. The Singapore crack for March is valued at – $ 0.5 /bbl whereas April is closer to -$ 1.0 /bbl.
Gasoline continued to ease albeit marginally. We need some significant draw in gasoline stocks for the crack to improve in a meaningful way.
The March crack is valued $ 10.80 /bbl while the April crack is valued at $ 10.70 /bbl.
180 CST Fuel Oil
Fuel Oil continues to hold its own in the markets. While both Europe too is awash with stocks, the Singapore situation is preventing the arb from open and, curiously enough, holding up prices. The March crack is valued at -$ 3.45/bbl and April around -$ 3.4/bbl.
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Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity