Oil prices rose on Monday in volatile trade as market participants lowered their expectations for how much OPEC might increase production and investors assessed the impact of a trade dispute between the United States and China. Brent crude futures settled $ 1.90 higher at $ 75.34 / bbl. WTI futures rose 79 cents to settle at $ 65.85 /bbl.
WTI’s crude’s discount to Brent widened to as much as $9.75 a barrel, after narrowing on Friday.
The tariff war between the US and China is showing signs of escalating as both sides are increasing the ambit of goods to which tariff would be applicable. China recently hinted that it may levy tariffs on crude oil imports as well. This could make a huge dent in the US bid to export oil.
Asia’s naphtha crack for first-half August hit $77.32 a tonne on Monday, making it the lowest front-month value in nearly two months as supplies were expected to increase. Demand remained firm but not enough to counter growing supplies.
Around 1.4 million tonnes of the product are expected to land in Asia in July, the highest monthly level since February. This came at a time when Middle Eastern supplies to Asia this month at up to 2.8 million tonnes are slightly higher than the average for the year to date.
The July crack is lower though at -$1.80
Asia’s gasoline crack similar was near a two-month low of $5.76 a barrel as high supplies weighed.
The July crack is lower at $ 8.35 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
The Asia diesel and jet fuel margins were supported on Monday due to supply disruptions in Japan following an earthquake that shut some refining operations. But with no known damage to the units, operations are likely to resume quickly, which could pressure margins later.
China’s exports of diesel in July are expected to be curbed as several independent oil refineries (teapots) have shut for maintenance after new tax rules.
However, this shortfall may be more than compensated for by exports coming out of India.
The July crack has dropped to $ 13.65 / bbl with the 10 ppm crack at $ 14.50 /bbl. The regrade is higher at $ 0.90 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s July fuel oil viscosity spread stayed at $10.75 a tonne on Monday, unchanged since June 12 but down from $12 at the start of the month.
The July 180 cst crack is lower at -$ 3.15 / bbl. The visco spread is at $ 1.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Fuel Oil cracks have again receded with the pullback in crude prices.
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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.