Crude Oil
Oil prices were mixed on Thursday as traders started booking profits. Brent crude settled at $67.23 a barrel, a drop of 32 cents. WTI crude futures rose 35 cents to settle at $58.61 a barrel.
During the day Brent hit a high of $68.14 per barrel before traders started selling.
Despite Thursday’s dips, crude has gained around a quarter in value since the start of the year. T
Holding crude back crude prices from rising further have been concerns that a global economic slowdown that has gripped large parts of Asia and Europe, and which is showing signs of spilling into North America, will soon dent growth in demand for oil.
Crude oil use by China’s refineries in the first two months of 2019 rose 6.1 percent from a year earlier to a record 12.68 million bpd.
Naphtha
Asia’s naphtha crack rose $3.92, to $56.33 a tonne on Thursday, the highest since Dec. 28, supported by a stream of demand.
South Korea’s LG Chem snapped up naphtha for second-half April delivery at premiums in the range of $3.25 to $4.50 a tonne to Japan quotes on a cost-and-freight (C&F) basis. LG Chem’s purchase has come in the same week as Lotte Chemical, SK Energy, Malaysia-based Titan and Taiwan’s Formosa have in total bought more than 230,000 tonnes of naphtha for second-half April delivery. Formosa alone bought 100,000 tonnes of open-specification grade averaging a premium of under $2 a tonne to its own price formula on a cost-and-freight (C&F) basis for second-half April delivery to Mailiao after skipping purchases for first-half April arrival. SK Energy paid premiums of $5 a tonne and above, while Titan paid a low single digit premium.
The March crack improved -$ 5.45 /bbl. The April crack is at -$ 5.65 /bbl
Gasoline
Asia’s gasoline crack rose to $6.66 a barrel, the highest since Oct. 12.
Light Distillate stocks in Singapore rose by 935 kb to 16.51 million barrels as per date reported by official sources yesterday.
The March crack is steady at $ 5.30 /bbl. The April crack is at $ 4.65 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10ppm gasoil widened by 6 cents to 9 cents a barrel to Singapore quotes, as the prompt-month time spread flipped back to a contango.
But a drawdown in weekly middle distillate inventories in Singapore, which slipped to a four-week low, kept a further slide in differentials under check.
Cash differentials for jet fuel firmed to a discount of 26 cents a barrel to Singapore quotes, from a 30-cent discount on Wednesday.
The March/April time spread for jet fuel was at a discount of 26 cents per barrel, compared with 39 cents in the previous session.
Middle Distillate stocks in Singapore fell by 189 kb to 12.05 million barrels.
The March crack has dropped to $ 12.70 /bbl with the 10 ppm crack at $13.65 /bbl. The regrade has come in sharply to – $ 0.05 /bbl.
The April crack is at $ 13.10 /bbl with the 10 ppm crack at $14.05 /bbl. The regrade has flipped back into positive territory at $ 0.35/bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Sharply lower deal values for physical fuel oil cargoes in the Singapore trading window pushed 380-cst cash premiums to an 11-month low on Thursday as suppliers continued to accept lower premiums.
Market sentiment soured in the past two trading sessions after the demand outlook was weighed down by official data on Wednesday that showed Singapore bunker fuel sales volumes in February sank a three-year low.
The front-month 380-cst barge crack against Brent fuel narrowed slightly to minus $3.65 a barrel, down from minus $3.40 a barrel on Wednesday. Despite the slightly wider crack discount, crack values were seen holding firm even though crude oil prices hit 2019 highs.
Singapore fuel oil inventories climbed to a four-week high of 22.18 million barrels in the week ended March 13 as weekly net imports recovered from an eight-month low hit in the previous week.
The March 180 cst crack is lower at $ 0.40 / bbl with the visco spread at 90 cents/bbl.
The April 180 cst crack is at $ 0.40 / bbl with the visco spread at 95 cents/bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh hedges to consider today. If FO cracks stay strong, 3Q19 cracks may be worth hedging.
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.
Click Here to see how all our recommendations have fared
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.