Crude oil futures staged a sharp recovery in the light of bullish DOE data. Brent gained 89 cents to close at $ 51.81 / bbl. WTI gained $ 1.14 to settle at $ 48.86 /bbl.
There appears to be further follow through recovery today as Brent is higher by 37 cents at $ 52.09. While the US reported a stock draw yesterday, Global Oil inventories reported a build in the month of January according to IEA. This is being attributed to a delayed response to a swell in production. The IEA goes on to estimate that if production cuts are maintained at current levels, there could be a decline of 500 kbpd in H1 2017. Current stock levels are reported at 3.03 Billion barrels.
DOE Stock Data
Gasoline stocks fell by 3.1 Million barrels, lalso a bit more than expected. Distillate stocks too fell by 4.2 million barrels.
Refinery runs fell further to 85.1%. Basiscally, this would imply that the product stock situation should change when refineries emerge from turn around or should cracks go higher.
The physical market saw spirited buying attracted by the discounts available to the markets. However, this did not impact the cracks much. The MOPJ crack for March is valued at $ 1.1 / bbl. and April at $ 1.0 /bbl. The Singapore crack for March is valued at – $ 0.6 /bbl whereas April is at -$ 0.8 /bbl. This is the same as yesterday’s levels
Gasoline cracks lost a little bit of ground today notwithstanding the strong draws in the US.
The April crack is valued at $ 10.6 /bbl.
180 CST Fuel Oil
The Fuel Oil is going on losing steam as fundamentals and supply demand balances are presently unable to justify the crack levels. The March crack is valued at -$ 4.20/bbl and April around -$ 4.1/bbl.
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Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity