Crude Oil
Crude resumed its upward trend after the DOE data showed draws in both crude and motor fuel products. Brent settled 56 cents firmer at $52.21 per barrel and WTI ended 41 cents higher at $49.07 a barrel.
DOE Data
According the DOE, Crude stocks drew by 1.8 million barrels (expectation of 2.4 MB), Gasoline stocks drew 400 KB (700 KB) and distillate stocks drew 1.9 million barrels (1.1 MB). While both crude and products showed draws, the extent of draw was less than expected in both crude and gasoline. Nevertheless, the market chose to focus on the draws and bid the market up to a high of $52.61 on Brent before settling significantly lower
So, how bullish is this data really?
If we look at it from the perspective of crude oil stocks, we can see the following picture.
Crude stocks are still higher than last years stock levels. It seems fairly apparent that there is a long way to go before we arrive at 5 year average stock levels.
If we look at the gasoline stock data, gasoline stocks today are actually higher than the same time last year. Furthermore gasoline demand is actually 3% lower than the same time last year. For us this number is key in terms of determining the long term impact on rebalancing.
Naphtha
Physical Naphtha continued to be weak with a conspicuous absence of buyers. BPCL was seen selling a physical cargo basis Argus quotes instead of Platts. It is not clear whether the purchase formula is a composite formula or just basis Argus.
The June Japan Naphtha- Dubai crack is lower at -$1.35 /bbl.
Gasoline
Gasoline cracks are marginally stronger today with being valued at $ 10.35 /bbl. The market does not seem to be impressed much by the US stock draws. However, we could see a demand for physical gasoline at the start of Ramzan.
Distillates
Some buying of Gasoil has been seen by HPCL for delivery to Vishakhaptnam. It is believed that this could be to compensate for loss of production due to the shut down of the Hindustan Mittal refinery at Bathinda.
Jet stocks at Japan are reported to be at an 8 week high notwithstanding a reduction in run rates.
The June Gasoil crack is valued at $9.9 /bbl. The regrade has slipped marginally to 45 cents.
Fuel Oil
The physical markets showed some strength in the background of lower crude oil prices. However ,the paper cracks were nearly uncanged. The June 180cst-Dubai crack is at -$ 3.05 (versus -$ 3.10 yesterday) / bbl and the Visco spread is at $1.10/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.