Crude prices were in negative territory for most of the trading day yesterday until the US opened and lifted prices to more or less Monday’s close. Brent rose 7 cents to settle at $50.80 /bbl, and WTI settled 4 cents lower at $47.55 /bbl.
In the absence of any news hitting the market the pullback would be largely attributed to anticipation of bullish data which would reinforce the rebalancing theme. The API data did provide some cheer for the bulls, but it does not seem to have translated into a strong move as yet.
In other news, the US has announced that it would sell 14 million barrels of oil from its SPR to help fund medical research.
The Crude statistical data reported by the API today showed a drop of 9.2 million barrels last week. This is the largest crude draw reported since September 2016. Gasoline stocks rose by a nominal 301 KB while distillate stocks fell by 2.1 million barrels.
The crude draw is once again extremely bullish. Having said that, the gasoline build is bearish and clearly points to the end of the driving season being close by. While the distillate draw is bullish, given the high level of stocks and the impending switch of refineries to the gasoil mode, its impact is not likely to be too high.
It is to be noted again that while crude stocks are falling, stocks at Cushing are rising for the second week in a row.
Weaker crude prices gave the prompt Naphtha crack a fillip as cargos on offer appear to be eagerly lifted by buyers. Supplies from Europe and the Middle East are expected to be of the order of 4.2 million tons of which 3 million tons would be from the Middle East.
The August crack is at $1.55/bbl today with September being valued at $ 1.50 /bbl
The prompt Gasoline crack was extremely strong yesterday and settled at a 6 month high of $ 12.96 /bbl.
Paper crack values are marginally strong @ 13.85/bbl and $ 12.40 / bbl for August and September respectively.
Gasoil cracks eased as freight prices make the arb to the West uneconomical.
The August gasoil crack is valued at $13.35 /bbl while the September Gasoil crack is valued at $ 13.45 /bbl. Regrade is at -$ 0.45 /bbl and -$ 0.50 for August and September respectively
Fuel Oil prices appeared to be slightly stronger. Though the prompt crack settled around $ 2.0 /bbl, the 180 cst crack is valued at -$1.75 / bbl for August and -$ 1.60 for September. The visco spread is at $ 0.55 /bbl for August and $ 0.80 / bbl for September.
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.
Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity