Crude oil prices rose slightly on Tuesday as Saudi exports fell and strong demand managed to absorb some of the excess supplies in the market. Brent crude settled up 42 cents at $48.84 /bbl, while WTI settled up 38 cents at $46.40 /bbl.
Saudi Arabia’s crude oil exports in May fell to 6.924 million barrels per day from 7.006 million bpd in April. On the demand side, refineries in China have increased their crude throughput in June to the second highest level ever. There is also news in the market that in its efforts to rebalance the market, Saudi Arabia is mulling a unilateral 1million barrels per day cut in its exports. This cut if actually implemented will help in offsetting the excess supplies from Nigeria and Libya, countries that are presently exempt from the OPEC pact for reduction in supplies.
While the above all point to a bullish outlook on crude prices, there are still worries about the supply glut persisting for the foreseeable future and markets not rebalancing until 2018. Adding to these worries is a recent news that Ecuador will no longer comply with an agreed OPEC production cut of 26,000 bpd due to the country’s financial difficulties.
In other news, the weekly inventory data released by American Petroleum Institute (API) showed a surprise build of 1.6 million barrels in crude stocks for last week. The market will now look to the data from the U.S. Energy Department’s Energy Information Administration (EIA).
Naphtha cracks have managed to strengthen considerably as Asia’s naphtha glut appears to easing as fewer European cargoes are expected to arrive in Asia in September, This is because the current discount levels to Japan quotes for spot naphtha are making it unattractive for sellers to move cargoes from the West to the East.
The August crack is valued at $0.05/bbl today.
Asia’s Gasoline crack is stronger on the back of bullish API inventory data which saw a significant drawdown of 5.4 million barrels for the last week.
The August crack has improved to $ 10.80 /bbl.
Distillate cracks have continued to weaken even as API inventory showed a drawdown of 2.9 million barrels for the last week as compared to a build of 2.1 million barrels in the week before.
The August gasoil crack is slightly lower at $ 12.00 /bbl. Once again, the regrade has improved and is valued at -$0.40 / bbl. today.
Fuel oil cracks have managed to recover slightly as traders are anticipating lower volumes to arrive in Singapore from the West as the East West arbitrage remains closed.
The 180 cst August crack is at -$0.80 /bbl. The visco spread is valued at $0.95 /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.