Oil prices stayed volatile in the run up to the OPEC meeting on 22 June. Brent crude futures settled 26 cents lower at $ 75.08 / bbl. WTI futures settled 78 cents lower to settle at $ 65.07 /bbl.
WTI’s crude’s discount to Brent continued to widen reflecting market expectation of just a notional increase in supply.
Libya has lost around 400 kb/d of oil output due to the recent militant attacks on oil terminals. Workers are still trying to put out the fire at the storage tanks and the militants are still present at the Ras Lanuf terminal. It was previously reported that Libya lost 400 KB (40%) of oil storage capacity due to fires at Ras Lanuf and Es Sider.
The API reported a draw in crude of 3 million barrels which was a bit more than expected. However, product builds were also a bit more than expected more or less neutralising the situation.
Asia’s naphtha crack extended losses and hovered near a two-month low for the second day at $73.38 a tonne on Tuesday as supplies were expected to increase in July versus June. More supplies coming through to Asia from the West including Europe and the Mediterranean have eroded premiums, although levels were still leaning on the high side.
Cargoes for first half August arrival in South East Asia are still attracting premiums of mid to high teens while Indian cargoes are still attracting premiums of around $ 25/MT to MOPAG quotes.
The July crack is marginally lower at -$1.85 / bbl
Asia’s gasoline crack to Brent oil hit a 22-month low of $4.50 a barrel as high crude prices at over $74 and ample petrol supplies weighed. Expectations of gasoline stocks in the U.S. being lower last week compared to a week before that failed to counter the bearish sentiment.
The July crack is lower at $ 8.00 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s cash differentials for jet fuel narrowed their discounts on Tuesday as traders remained optimistic about steady aviation demand through the remainder of the summer travel season. Jet fuel cash differentials were at a discount of 29 cents a barrel to Singapore quotes, compared with a discount of 30 cents on Monday.
Meanwhile, cash premiums for gasoil with 10ppm sulphur content were at 16 cents a barrel to Singapore quotes, up from 15 cents on Monday..
The July crack is marginally lower at $ 13.60 / bbl with the 10 ppm crack at $ 14.45 /bbl. The regrade is higher at $ 1.05 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s July fuel oil viscosity spread was at $10.75 a tonne on Tuesday, holding steady since June 12. The market seems fairly well balanced otherwise.
The July 180 cst crack is much stronger -$ 2.55 / 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 strengthened. If they improve below -$ 2.50 / bbl, we will add another tranche.
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 refiner.
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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.