Oil prices rose on Thursday, boosted by signs of a strong economic rebound in top crude importer China and easing worries of aggressive U.S. rate hikes.
London-traded Brent crude for April delivery did a last trade of $82.64 per barrel on Friday. It ended the regular session up $1.19, or 1.5%, at $82.78. Brent was down 3.8% on the week.
WTI Crude for April delivery did a final trade of $76.68 per barrel on Friday. It settled the official session up 96 cents, or 1.3%, at $76.80 per barrel. For the week, like Brent, the U.S. crude benchmark finished down 3.8%.
Private Indian refiners are jostling with independents in China for Russian ESPO crude loading in April, pushing prices higher after Moscow lowered exports of its flagship grade Urals, industry sources said.
India’s fuel demand hit its highest level in at least 24 years in February, data showed, with industrial activity in Asia’s third biggest economy boosted by cheap Russian oil.
Broader U.S. employment data for February beat expectations with nonfarm payrolls rising by 311,000, compared with expectations of 205,000 jobs added, according to a Reuters survey. This is likely to ensure that the Fed will raise interest rates for longer, which analysts have said would weigh on oil prices.
However, the U.S. Federal Reserve may have less reason to raise interest rates as aggressively as some had feared, after a government report on Friday rekindled hopes of easing inflation amid signs the pandemic-disrupted labor market is normalizing.
The number of active oil rigs in the U.S. fell by 2 to 590 this week, their lowest since June, according to data from Baker Hughes.
Asia’s naphtha refining profit margin weakened by about 15% last week amid a decline in prices of second-half April naphtha to over one-month low.
Asia’s refining profit margin for naphtha crack by $10.13 to $97.28 a tonne over Brent crude on Friday. Naphtha margins have slumped over 29% in March so far due to volatility in crude oil benchmarks.
Naphtha stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) hub dropped to 248,000 tonnes in the week to March 9, from 293,000 tonnes in the week to March 10 last year, Insights Global data showed.
The April crack is lower at -$5.25 per barrel
Asia’s gasoline crack also declined 65 cents to $12.72, although the downside was capped as buyers actively sought the benchmark grade gasoline at the Singapore window.
Gasoline stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) hub rose to 1.39 Million tonnes in the week to March 9, from 1.15 Million tonnes in the week to March 10 last year, Insights Global data showed.
The April crack is higher at $13.95 per barrel.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s 10-ppm sulphur gasoil margins fell 16.6% on week, after five consecutive sessions of losses, tracking the overnight fall in northwest Europe and an almost 5% weekly drop in oil futures.
The Asia-Europe arbitrage spread on paper, known as the Gasoil EFS, widened day on day to a discount of $67.12 as a result.
Cash differentials for 10 ppm sulphur gasoil fell for a fourth consecutive session, closing the week at 55 cents a barrel.
Jet fuel refining margins fell to around $19 per barrel – almost nearing a one-year low.
The swaps market structure switched to a contango, with prompt prices trading lower than forward prices, reflecting weakness for prompt cargoes.
Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage area slipped for a second week in a row, data from Dutch consultancy Insights Global showed on Thursday. Gasoil stocks fell 2.6% to 2.49 million tonnes, even as demand from inland locations slowed on the week and imports into the region remained strong, Insights Global’s Lars van Wageningen said.
The April crack for 10 ppm Gasoil is higher at $24.40 /bbl. The 10 ppm regrade is at -$2.75 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Refining margins for very low sulphur fuel oil (VLSFO) in Asia posted a mild weekly gain despite heavy supply arrivals this month, data showed Friday.
The front-month April margin for 0.5% VLSFO rose 5 cents from its previous session to $8.75 per barrel at the Asia close (0830 GMT), firming by 5% week-on-week.
Arbitrage supplies are likely to remain heavy into March, though arrivals could ease in April amid expectations of lower exports from the West due to spring maintenance in Europe, industry sources said. A narrower East-West price spread could also incentivise less arbitrage volumes to the East of Suez in April, they added.
Singapore’s cash differential for 0.5% VLSFO held steady at $4.50 a tonne on Friday. The spot market has been hovering in thin single-digit premiums since the start of the month.
Fuel oil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub jumped 14% to 1.30 million tonnes in the week ended March 9, hitting 20-month highs, latest data from Dutch consultancy Insights Global showed.
The April crack for 180 cst FO is higher at – $12.05 /bbl with the visco spread at $2.55 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
We shall add 92 Unleaded Dubai crack for 2Q23 at current levels of $13.20 per barrel. We shall also add Gasoil 10ppm Dubai for 2Q23 at current levels of $23.50 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.
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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.