Crude Oil
Crude Oil prices moved in a tight range of $ 46.70 – $ 47.20 basis Brent before Brent settled marginally lower at $46.92 /bbl (-8 cents). WTI settled 27 cents lower at $44.46 /bbl.
This area, given yesterday’s price action, appears to be a fairly critical area in the absence of fresh news. Given the history, we would call for a rise in prices towards $ 48.00 /bbl while $46.70 is not breached. This is a purely amateur technical call which we would only do rarely.
Naphtha
The naphtha cracks managed to rise slightly encouraged by the favourable inventory numbers which saw Singapore’s onshore light distillates stocks fall by about 9.5 percent or 1.193 million barrels to reach a seven-month low of 11.413 million barrels in the week ended July 14.
The June Japan Naphtha- Dubai crack is slightly higher at -$0.45 /bbl and the July crack is at -$0.70 /bbl
Gasoline
Gasoline cracks have managed to recover slightly even as the weakness in the U.S. gasoline market continues to exert downward pressure in Asia. As per EIA, the current U.S. gasoline inventories are at 242.4 million barrels, above the five-year average of 223 million barrels.
June crack is slightly up at $10.20 /bbl while the July crack is at $ 9.40 /bbl
Distillates
Distillate markets continue to strengthen on the back of strong demand and bullish Singapore inventory data. According to International Enterprise, Singapore onshore gasoil and jet fuel stocks fell by 1 percent to a five-week low of 12.35 million barrels in the week to June 14. Increased diesel shipments to Australia, Myanmar and Sri Lanka contributed to the drawdown in inventory.
The June crack is up at $ 11.40 /bbl while the June regrade has recovered to -$0.30 /bbl. The July crack is at $ 10.75 /bbl with the July regrade now at -$ 0.20/bbl
Fuel Oil
Although the Fuel Oil cracks have strengthened once again with tightening supplies in the spot market, we continue to remain skeptical of this uptrend because of the ample offshore inventories. Even thought the number of very large crude carriers (VLCCs) storing fuel oil has now fallen to about 4 to 5 from a peak of 8 to 9, stocks are expected to remain high as barrels from the West enter Singapore in June. In fact, the latest data from International Enterprise shows that Singapore fuel oil stocks surged by 27 percent to hit a six-week high of 22.20 million barrels.
The June 180 cst crack is stronger at $ 0.50 / bbl/ The visco spread is unchanged at $ 1.35 / bbl. The July crack is at -$0.40 /bbl
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.