Crude Oil

Crude oil prices continue to slide amidst growing fears of a worsening supply glut. Brent fell 46 cents, or 1 percent, to settle at $46.91 /bbl while WTI declined 54 cents, or 1.2 percent to settle at $44.20 /bbl.

Supplies are set to only go up further with Libya’s oil production rising by over 50,000 bpd to 885,000 bpd after the state oil firm settled a dispute with Germany’s Wintershal. It is relevant to note that both Libya and Nigeria are exempt from OPEC’s production cut agreement.

Meanwhile, Saudi Arabia (defacto leader of OPEC) continues to insist that the market will rebalance by 4Q2017 and prices will stabilize. In a statement to the Saudi press on Monday, the Saudi Energy Minister Khalid al-Falih stated that “The forecasts that the oil market will re-balance in the fourth quarter have taken into consideration the rise in shale oil production”. He added that the rise in crude output from Libya and Nigeria is also not posing a threat as “the level of increase from these two countries is still within the limits set by the Algeria agreement of 500,000 barrels a day”.


Physical cargoes continue to be traded in the markets with India’s BPCL heard to have sold a 33,000 MT parcel for July loading from Mumbai . Elsewhere, Qatar Petroleum has sold a total of 140,000 tonnes of naphtha, comprising three different grades, for second-half July loading from Ras Laffan.

The July crack has improved to -$0.55 /bbl


The Gasoline market is relatively quiet at the moment with all eyes on the API inventory numbers slated to be released later today. Last week we witnessed an increase in US inventories which was in contrast with falling stock levels in both Europe and Singapore.

The July crack is unchanged at $ 9.80 /bbl


Distillate markets continue to strengthen on the back of strong demand especially out of India with HPCL now tendering for almost 200,000 MT of diesel for supply in July next month. Tanzania’s Petroleum Bulk Procurement Agency is also seeking close to 200,000 MT of 50ppm sulphur gasoil and about 22,000 MT of ATF and kerosene for delivery in August.

In other news, Chinese state oil giants Sinopec and PetroChina are waging war at the nation’s gas pumps, slashing prices at unprecedented rates in an effort to reclaim sales lost to private local and foreign rivals in the $440 billion retail fuel market. This price war kicked off in late March as Sinopec reported first quarter retail sales had slid to a three-year low. Spurred by a glut of fuel caused by the Chinese government’s  limited quota for exporting oil products, Sinopec started offering hefty discounts in response to ad-hoc but frequent promotions by independent petrol station operators. Given the excess supply and ongoing price war, we could a rise in exports of diesel from China.

The July crack is slightly higher at $ 11.10 /bbl with the July regrade down at -$ 0.40/bbl

Fuel Oil

The Fuel Oil cracks are higher as some suppliers face a shortage of the fuel since it had accumulated in the hands of a few providers. On the Platts window, four cargo totaling 40,000 tonnes of 380-cst fuel oil were reported with Hin Leong having bought the entire quantity, equally from PetroChina and Coastal.

The The July crack is stronger at -$0.10 /bbl with the visco spread lower at -$1.05/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.

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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