Crude Oil
Oil futures fell on Monday as the negative turn in the U.S.-Chinese trade talks spooked investors. Brent crude futures settled at $70.23 a barrel, 39 cents lower. WTI crude futures fell 62 cents to settle at $61.04 a barrel.
Oil prices earlier had risen more than $1 a barrel after Saudi Arabia said two Saudi oil tankers were among vessels attacked off the coast of the United Arab Emirates. It was unclear how the attacks occurred. On Sunday, the UAE said four commercial vessels were attacked near Fujairah, one of the world’s largest bunkering hubs. The port lies near the Strait of Hormuz, a vital oil export waterway.
Iran’s foreign ministry described the incidents as “worrisome and dreadful” and called for an investigation. Iran insists on being able to export at least 1.5 million bpd of oil, triple May’s expected levels under U.S. sanctions, as a condition for staying in an international nuclear deal.
China defied a warning from U.S. President Donald Trump and moved to impose higher tariffs on a range of U.S. goods including frozen vegetables and liquefied natural gas. The action was widely expected after Washington last week raised tariffs on $200 billion in Chinese imports. Investors fear the trade war between the world’s two largest economies could escalate further and derail the global economy.
U.S. President Donald Trump said on Monday he would meet Chinese President Xi Jinping next month as the trade war between the world’s two largest economies intensified, sending shivers through global markets. China announced earlier it would impose higher tariffs on a range of U.S. goods, including frozen vegetables and liquefied natural gas, a move that followed Washington’s decision last week to hike its own levies on $200 billion in Chinese imports.
Meanwhile, U.S. oil output from seven major shale formations is expected to rise by about 83,000 barrels per day in June to a fresh peak of about 8.49 million bpd, the U.S. Energy Information Administration said in its monthly drilling productivity report on Monday.
Naphtha
Asia’s naphtha crack edged up 50 cents to a two-session high of $38.05 a tonne.
Fundamentals were stronger with demand seen for naphtha and cracker outage in Japan has been resolved. Japan’s Mitsui Chemicals has restarted its 612,000-tonnes-per-year (tpy) Ichihara naphtha cracker following a glitch that caused the unit to be idled for more than a week.
The May crack is lower at – $ 7.35 /bbl. The June crack is at – $5.95 /bb;
Gasoline
Asia’s gasoline crack climbed 20 cents to a five-session high of $4.89 a barrel on Monday.
The May crack is lower at $ 4.95 / bbl. The June crack is at 5.20 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
The average 10ppm gasoil and jet fuel cash differentials between Jan. 2 and May 14 were at a discount of 27 cents a barrel and 58 cents a barrel, in sharp contrast with premiums of 28 cents and 72 cents for the same period last year.
Demand for middle-distillates were particularly lacklustre in Indonesia, where state-owned Pertamina halted jet fuel imports at the start of the year because it had sufficient inventories.
Bangladesh and Petron Singapore, on the other hand, were looking to buy gasoil.
The May crack for 500 ppm Gasoil is lower at $ 12.60 /bbl with the 10 ppm crack at 13.25 / bbl. The regrade has fallen to -$ 0.25 /bbl
The June crack for 500 ppm Gasoil is at $ 14.00 /bbl with the 10 ppm crack at 14.65 / bbl. The regrade is at -$ 0.20 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The front-month 380-cst barge crack widened its discount on Monday as benchmark crude oil prices climbed. The June 380-cst barge crack was at a near three-week low of minus $7.93 a barrel to Brent crude, down from minus $7.51 a barrel on Friday.
The May 180 cst crack is lower at – $ 4.55 / bbl with the visco spread at $ 1.90 /bbl.
The June180 cst crack is at – $ 3.45 / bbl with the visco spread at $ 1.60 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to report today.
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.
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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.