Crude Oil
After staying in strongly positive territory for most of the day, oil prices gave up all their gains on Tuesday, weighed down by a strengthening U.S. dollar as investors remained concerned about the financial crisis in Turkey. Brent crude dipped 15 cents to settle at $72.46 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 16 cents to close at $67.04 a barrel.
The closure in the red assumes significance in light of the fact that at the start of US trading hours, Brent had touched a high of $ 73.93 a barrel, $1.47 higher than its final settle.
The high’s were attributed to a combination of reasons such as Saudi having cut production in July and the ongoing tension between the US and Turkey.
In the meanwhile, the high crude prices appear to have been taking toll on demand with a number of physical cargoes remaining unsold and floating in the Atlantic Basin. There are reports that Russian and Nigera are also cutting prices for certain grades. A few days ago, Iraq cut the OSP for sale some of its crudes as well.
API Data
The API reported a surprise build of 3.7 million barrels, a news which sent the market down immediately post release. Inventories at the Cushing hub were also reported as having increased by 1.64 million barrels.
Naphtha
Asia’s naphtha crack extended gains for a second day on Tuesday to reach a three-session high of $101.90 a tonne, but markets said the marginal 0.2 percent increase was a correction after last week’s dramatic fall.
Taiwan’s Formosa, Asia’s top naphtha importer, was seeking cargoes for the second half of September in an otherwise slow-moving market because of forthcoming cracker maintenance in Japan and South Korea. China’s CNOOC was also looking to buy naphtha.
Supplies were expected to increase with more cargoes potentially arriving next month from the West after volumes for August arrival fell to a five-month low.
The August crack has jumped to $ 0.35 /bbl. September is at -$ 0.10 /bbl
Gasoline
There appears to have been a dramatic rise in the gasoline crack in the prompt for reasons that are not immediately clear. .
The balance August crack has shot up to $ 11.00 / bbl. The September crack is at $ 10.05 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s 500-ppm gasoil crack was at its highest level in over two months on Tuesday, supported by a recent drawdown of stocks in Singapore,
Japan’s Taiyo Oil restarted a 106,000 barrels per day crude distillation unit (CDU) at its Shikoku refinery on Aug. 12 following maintenance that started on June 8.
The balance August crack is steady at $ 15.25 / bbl with the 10 ppm crack at $ 16.15 /bbl. The regrade has dropped to $ -0.40 /bbl.
The September crack is at $ 15.10 / bbl with the 10 ppm crack at $ 16.00 /bbl. The regrade is at $ 0.10 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Weaker sentiment on Tuesday saw Asia’s fuel oil market extending losses as expectations of improved arbitrage supplies into Asia in September may begin to ease supply shortages that have characterized the market since around the start of summer. The 380-cst Sept/Oct time spread was trading at about $5.25 a tonne by Asia close, down from $5.75 a tonne on Monday.
The front-month 380-cst time spread is now at a one-week low. The September 380-cst barge crack to Brent crude was trading at a one-week low of minus $8.82 a barrel on Tuesday compared to minus $8.30 a barrel on Monday.
The balance August 180 cst crack is steady at -$ 1.50 / bbl with the visco spread at $ 0.90 /bbl.
The September180 cst crack is at -$ 2.35 / bbl with the visco spread at $ 1.25 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to report.
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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.