Crude prices recovered the previous day’s losses in the absence of any fresh news. Brent rose 76 cents to settle at $ 51.03 /bbl, and WTI settled 31 cents higher at $47.09 /bbl.
While news reports attribute the pullback in prices due to industry focus on stocks at Cushing, we would be more inclined to attribute this to technical correction and possibly successful holding of the 100 DMA as a support.
As we had mentioned in our report yesterday, the large crude draw was significantly bullish and this could be a delayed response to the trigger.
Strong fundamentals continue to support the Naphtha market which is in backwardation to the tune of $ 2 / MT for H1 October – H1 November. Buyers are also now seen in the market for cargoes for first-half October delivery.
The August crack is stronger at $1.90/bbl today with September being valued higher at $ 1.85 /bbl
Gasoline cracks have found support by way of easing inventories in the East. Singapore’s onshore light distillates stocks, which comprise mostly gasoline and blending components for petrol, eased 1.27% to a two-week low of 15 million barrels in the week to August 16. Although this was down from over one-year high in the previous week, the inventory numbers are still pretty high for this time of the year.
The 92RON cracks are up @ 15.30/bbl and $ 13.65 / bbl for August and September respectively.
The Distillate cracks under pressure due to increasing inventories in the key trading hub of Singapore. Singapore’s onshore jet fuel and gasoil inventories rose by approximately 16% to a three-week high of 13.64 million barrels in the week to August 16 which is extremely high for this time of the year. This build up was mainly attributed to falling exports to Australia and Indonesia on the one hand and rising imports from China, India & Japan on the other hand. With the arbitrage economics feasible, traders are looking to move distillate cargoes from the U.S. East Coast to the East.
The August gasoil crack is valued marginally lower at $13.00 /bbl while the September Gasoil crack remains unchanged at $ 13.15 /bbl. Regrade has improved to -$ 0.20 /bbl and -$ 0.35 for August and September respectively
Although valued slightly higher today, Fuel Oil cracks are under pressure on account of rising stocks in trading hubs of Fujairah and Singapore. While the fuel oil inventories in Fujairah were up 80,000 MT from the previous week, onshore fuel oil inventories in Singapore rose by 102,000 MT, to a three-week high of 3.63 million MT in the week to August 16.
The 180 cst crack is valued at -$1.50 / bbl for August and -$ 1.35 for September. The visco spread is at $ 0.50 /bbl for August and $ 0.80 / bbl for September, unchanged from yesterday.
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