Oil prices rose 1 percent on Tuesday, as fighting in Libya raised concerns about political strife. Brent crude futures gained 54 cents to settle at $71.72 a barrel. WTI futures rose 65 cents to settle at $ 64.05 a barrel.
In Libya, fighting between Khalifa Haftar’s Libyan National Army and the internationally recognized government has raised the prospect of lower supplies from the OPEC member. U.S. sanctions on two other members, Iran and Venezuela, are already cutting shipments. Iran’s crude oil exports have dropped in April to their lowest daily level this year.
Applying downward pressure, however, were concerns about Russia’s willingness to stick with OPEC-led supply cuts
Prices extended gains in post-settlement trade after data from the API showed that U.S. crude inventories fell unexpectedly.
Crude stocks were reported lower by 3.1 million barrels, versus analysts’ expectations of a 1.7 million-barrel build. Gasoline stockpiles fell by 3.6 million barrels, once again, a lot more than forecasts of a 2.1 million-barrel drop. Distillate stocks, however, built by 2.3 million barrels.
Gasoline imports into the U.S. West Coast from Europe are set to hit a record in April as area refinery shutdowns have tightened supplies and boosted prices. Most of the barrels were coming from the Netherlands. The West Coast has been affected this season by planned and unplanned refinery shutdowns and Midwest floods preventing ethanol from reaching California, which is geographically isolated in terms of pipelines and energy infrastructure
Asia’s naphtha crack hit a one-week low of $45.78 a tonne on Tuesday on the back of muted demand.
Buyers seeking cargoes for June delivery have yet to emerge.
The current crack level was about 20 percent lower than a month ago, reflecting that fundamentals at present were weaker. This could be due to crackers in Japan and South Korea going into turnaround mode in May.
The May crack is lower at – $ 5.95 /bbl
Asia’s gasoline crack was at a four-session low of $8.27 a barrel but unlike naphtha, the former is more than 35 percent higher than levels from one month ago as seasonal driving demand gave petrol support.
The May crack is lower at $ 7.75 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash discounts for gasoil with 10ppm sulphur content narrowed to 16 cents a barrel to Singapore quotes, as against a discount of 18 cents a barrel on Monday.
Cash discounts for Jet fuel on Tuesday were at 15 cents a barrel to Singapore quotes, the smallest discounts since March 11. They were at a discount of 19 cents per barrel a day earlier.
The May crack for 500 ppm Gasoil is higher at $ 13.45 /bbl with the 10 ppm crack at 14.10 / bbl. The regrade is at – $ 0.25 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s 380-cst fuel oil cash discounta narrowed to a near two-week high on Tuesday, lifted by a surge in buying interest for physical cargoes of the fuel in the Singapore trading window.
Cash differentials for 380-cst HSFO contracted for the third straight session to minus $2.31 per tonne to Singapore quotes, the narrowest discount since April 4. This compared with minus $2.48 a tonne on Monday.
Meanwhile, expectations of ample supplies and sluggish demand for May dragged the front-month East-West arbitrage spread to $12.75 per tonne on Tuesday, its lowest since April 2018, from $14.25 per tonne on Monday.
The May 180 cst crack is lower at – $ 3.25 / bbl with the visco spread at $ 1.35 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
All our FO hedges for May and June have now been squared off.
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.