Oil prices held at near four-month highs on Monday as markets continued to stay uncertain about the impact of OPECs decision on crude supplies. Brent crude settled 7 cents higher at $67.61 a barrel. WTI crude futures eased 6 cents to settle at $59.03.
Both benchmarks weakened after Bloomberg reported U.S. officials were concerned Beijing was pushing back against Washington’s demands during trade talks, lowering hopes for a resolution to the tariff war that has threatened global oil demand.
After a short gathering in Azerbaijan on Monday, the OPEC+ group scrapped its planned meeting in April and will decide instead whether to extend output cuts in June, once the market has assessed the impact of U.S. sanctions on Iran and the crisis in Venezuela. The move to cancel the meeting favored Russia over Saudi Arabia, which originally wanted to use the meeting to extend output curbs until the end of the year. OPEC will next meet in June.
Venezuela has suspended its oil exports to India and views Russia and China as its main export destinations, the Azeri energy ministry said on Tuesday, citing Venezuela’s oil minister.
Prices inched up in post-settlement trade after data from the API showed a surprise draw-down on crude inventories. Crude stocks fell by 2.1 million barrels in the week to March 15, to 446.8 million, compared with analysts’ expectations for an increase of 309,000 barrels, the data showed. Both Gasoline and Distillate stocks too drew more than expected.
Asia’s naphtha crack erased losses in the previous session and climbed to a fresh 2-1/2 month high of $60.82 per tonne on Tuesday.
The April crack is slightly higher at -$ 5.15 /bbl
Asia’s gasoline crack climbed to a near five-month high of $6.21 a barrel, up 50 cents per barrel from the previous session. The rising crack values came in spite of increasing crude oil prices on Tuesday, which were near 2019 highs.
Margins of light distillate fuels have been boosted by improved demand and tightening supplies amid heavy refinery turnarounds in Asia, but gains could be capped as supplies resume.
A fire at a Houston-area petrochemical storage site continued to rage late on Monday and is expected to burn for up to two more days, officials said, as it sends thick black smoke into the air for miles around. The blaze at a site along the Houston Ship Channel in Deer Park, Texas, began on Sunday when a leak from a tank containing volatile naphtha ignited and spread to others in the same complex, the company said. The tanks hold tens of thousands of barrels of products used to boost gasoline octane, make solvents and plastics.
The April crack is higher at $ 5.80 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash discounts for 10ppm gasoil were at 23 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 19 cents per barrel a day earlier. There were no gasoil deals in the Singapore physical trading window on Tuesday.
The front-month time spread for the benchmark gasoil grade widened its contango structure by a cent to a discount of 17 cents a barrel on Tuesday.
The overall middle distillates market, however, should get some support in the near-term as some regional refineries undergo planned seasonal turnarounds. Indian state refiners will be shutting gasoiland gasoline-making units at their plants this year to churn out cleaner Euro VI-compliant fuels from January 2020 to be able to sell them from April of that year.
Cash discounts for 500ppm gasoil were at 73 cents a barrel to Singapore quotes on Tuesday, compared with a 75-cents discount on Monday.
Cash discounts for jet fuel widened to 40 cents a barrel to Singapore quotes, compared with a discount of 29 cents per barrel on Monday.
The April crack is higher at $ 13.15 /bbl with the 10 ppm crack at $14.10 /bbl. The regrade has flipped back into discount at – $ 0.05/bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Weak sentiment continued to weigh on Asia’s high-sulphur fuel oil market as 380-cst cash premiums and time spreads sank to fresh lows on Tuesday.
In the physical market, tepid demand weighed on 380-cst cash premiums, which slipped to a 11-month low of 71 cents a tonne above Singapore quotes.
Similarly, 380-cst ex-wharf differentials were trading near parity as demand concerns and steady supplies continue to dampen sentiment.
In the paper markets, the front-month 380-cst time spread was also at an 11-month low of $1.25 per tonne on Tuesday, down from $1.50 per tonne on the previous session and $3.75 per tonne a week ago.
The April 180 cst crack is at $ 0.15 / bbl with the visco spread at $ 1.25 cents/bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh hedges to consider today.
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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.