Oil prices continued to rise on Tuesday as uncertainty about sanctions impact continued. Brent 20 cents to settle at $ 78.43 /bbl. West Texas Intermediate crude rose 35 cents to settle at $ 71.31 /bbl.
Crude prices fluctuated wildly during the US trading day with Brent hitting a peak of $79.47 before touching a low of $77.91 /bbl. This sort of movement can be expected to continue till some clarity is obtained on Iran.
The API reported a surprise build of 4.9 million barrels of crude this week against analysts expectations of a small draw. However, gasoline stocks drew more than expected while distillate stocks drew less than expected. As usual, the market will look to the DOE for confirmation later today.
Asia’s naphtha crack continued to slip to $107.08 /MT on Tuesday. The rise in crude prices could have had an impact on the crack. However, naphtha fundamentals were strong thanks to recent firm demand and squeezed supplies. This was reflected in the intermonth spread, where front-month second-half June naphtha remained $14.50 a tonne higher than the following month of second-half July. This was more than double the value a year ago, when the front-month price was $6.50 higher than the following month.
The June crack has slipped further to – $ 0.20 / bbl
Asia’s gasoline crack fell 6% to settle at $7.11 /bbl probably affected by high crude prices as well.
The June crack has improved to $ 11.30 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s cash premiums for jet fuel eased for a second straight session on Tuesday, dipping to the lowest level in four months on concerns of rising supply as refineries return from seasonal maintenance. Cash premiums for jet fuel dipped to 3 cents a barrel to Singapore quotes. Premiums were at 10 cents on Monday. The jet fuel market, however, will find support from the region’s steady aviation demand in the near term.
Cash differentials for gasoil with 10 ppm sulphur content dipped by a cent to 54 cents a barrel to Singapore quotes on Tuesday. Overall gasoil demand is supportive, while there’s not much supply -looking at that balance, the market seems quite constructive at the moment. .
The June crack is marginally stronger at $ 15.60 / bbl with the 10 ppm crack quoting at $ 16.30 /bbl. The regrade has dropped to $ 0.40 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Ongoing supply constraints lifted cash premiums of Asia’s 380-cst high-sulphur fuel oil higher on Tuesday. The ample supplies of high-viscosity, high-density fuel oil in Singapore and a shortage of cutter-stock since around the start of April is likely to keep prices elevated over the near term. Meanwhile, higher crude prices weighed on the fuel oil crack to Brent crude. Despite losses on Tuesday, the fuel oil crack continues to be strong relative to recent gains in crude oil.
The June 180 cst crack has improved to -$ 4.50 / bbl. The visco spread has increased to $ 1.65/bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
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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.