Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices fell for the first time in five days as market participants showed their displeasure at Europe’s continued waddling over its proposed ban on Russian oil.

Brent crude futures settled at $111.93 per barrel, down $2.31, or 2%. The global crude benchmark had also risen by 11.5% between May 10 and 16,  reaching a one-month high of $114.79 in the previous session.

WTI crude futures settled at $112.40 per barrel, down $1.80, or 1.6%. The U.S. crude benchmark had risen a cumulative 14.5% over four prior sessions, reaching a 7-week high of $114.90 on Monday.

Adding to the weight on oil was a Reuters report that the Biden administration was due to issue imminent approval for U.S. oil company Chevron Corp (NYSE:CVX) to negotiate a reopening of business with Venezuelan President Nicolas Maduro’s government, temporarily lifting a ban on such discussions.

The inclination to wait out industry data on U.S. stockpiles, due after Tuesday’s market settlement, also led to choppy price action that eventually resulted in the lower close

Russian crude output fell by nearly 9% to 9.16 million barrels per day (bpd) compared with March levels, according to assessments by OPEC+ secondary sources, an internal report seen by Reuters on Tuesday showed.

API data

The API data was quite bullish showing an unexpected draw for crude and a massive draw for gasoline. The build in distillates was a mild pullback. We shall examine official data later today.

At a global level, the death toll from the COVID-19 virus rose to 6.29 Million (+1,590 DoD) yesterday. After yet another recalibration, the total number of active cases rose by 100,000 DoD to 23.84 million. (Click here for details).

Asia’s naphtha crack slumped to $62.97 a tonne, its lowest since December 2020, down from $108.50 in the previous session.

The June crack is lower at -$ 5.70 per barrel 

Asia’s gasoline refining profit margin extended gains on Tuesday and scaled a new high due to firmer demand as mobility restrictions eased in key economies. The crack rose to $32.03 a barrel from $30.96 in the previous session, even as crude prices rose.

The June crack is higher at $34.00 per barrel.

Click Here for a graphical depiction of Global Gasoline stocks by region.

Asian gasoil markets continued to weaken on Tuesday after posting weekly decline for two straight weeks, due to poor demand outlook in China caused by COVID-19 restrictions. 

Cash premiums for gasoil with 10 ppm sulphur content fell to $5.80 a barrel to Singapore quotes, compared with $6.59 per barrel in the last session.

Refining margins, also known as cracks, for 10 ppm gasoil fell to $34.85 a barrel over Dubai crude during Asian trading hours, compared with $36.29 per barrel on Friday.

Meanwhile, price reporting agency S&P Global Platts said on Tuesday it will no longer reflect products with Russian origin in its open origin European diesel and gasoil cargo assessments effective June 1.

The June crack for 500 ppm Gasoil is lower at $34.10 /bbl with the 10 ppm crack at $35.10 /bbl. The regrade is at -$7.10 /bbl.

Click Here for a graphical depiction of Global Distillate stocks by region.

Asia’s cash premiums for 380-cst high-sulphur fuel oil (HSFO) fell for a second straight session on Tuesday, and the front-month barge crack declined further after crude oil benchmarks strengthened.

Cash differentials for 380-cst HSFO dipped to a premium of $5.97 per tonne to Singapore quotes, compared with $6.01 a tonne on Friday.

The front-month barge crack for 380-cst HSFO traded at a discount of $14.53 a barrel to Brent on Friday, compared with minus $14.38 a barrel in the previous session.

Cash premiums for 380-cst high sulphur fuel oil (HSFO) dipped to a premium of $6.01 per tonne to Singapore quotes, while cash differentials for 180-cst HSFO fell to a premium of $14.98 per tonne to Singapore quotes.

The front-month barge crack for 380-cst HSFO traded at a discount of $14.38 a barrel to Brent on Friday, compared with minus $13.77 a barrel in the previous session.

Fuel oil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped 4.6% to 1.03 million tonnes in the week ended May 12, data from Dutch consultancy Insights Global showed.

The June crack for 180 cst FO is higher at – $2.70 /bbl with the visco spread at $4.90 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

No fresh trades today.

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 refinery.

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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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