Crude prices returned to the green on Thursday after a two-day slide but remained well below their recent highs amid reports that President Joe Biden might meet Saudi Arabia’s crown prince after all in a diplomatic turnaround that could ostensibly compel the key oil producer to consider U.S. requests for more supply.
Brent crude futures settled up $2.93, or 2.7%, at $112.04 a barrel. The global crude benchmark lost 4.5% in two prior days of trading after rising about 12% in four sessions before that, hitting a one-month high of $114.79.
WTI crude futures settled up $2.62, or 2.4%, at $112.21 a barrel. The U.S. crude benchmark lost 4% over two prior days after rising a cumulative 14.5% in four sessions before that enabled it to hit a seven-week high of $114.90.
Crude benchmarks continued their spate of wild swings, with both Brent and U.S. crude rising by nearly $5 a barrel in the span of a few hours, recovering from losses earlier in the week.
Thursday’s rebound in oil came on the back of hopes that planned easing of Covid restrictions in Shanghai could improve fuel demand in China, the world’s largest importer of oil.
Oil markets also rebounded as the dollar weakened. The broad dollar index was down 1% on the day after recent gains.
At a global level, the death toll from the COVID-19 virus rose to 6.30 Million (+1,763 DoD) yesterday. After yet another recalibration, the total number of active cases was static DoD at 23.97 million. (Click here for details).
No fresh news on the naphtha markets.
The June crack is higher at -$ 5.40 per barrel
Asia’s gasoline refining profit margin took a breather on Thursday after hitting a record high in the last session, although the losses were limited by a decline in inventories at the key trading hub of Singapore. The crack retreated to $31.75 a barrel from $33.91 in the last session.
“Gasoline demand is Asia has been supported mainly due to increased buying from Indonesia as the Asia’s biggest gasoline importer announced further loosening of COVID-19 related restrictions,” Mohammed Yasser, a senior analyst at Refinitiv Oil Research, said in a note.
The June crack is higher at $32.95 per barrel.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s cash premiums for 10 ppm gasoil dropped to a two-month low on Thursday, weighed down by weaker buying interests in the physical trade window, while refining margins for the industrial fuel grade plunged to their lowest in over a month.
Cash differentials for gasoil with 10 ppm sulphur content which have shed over 40% in the last two weeks, were at a premium of $5.14 a barrel to Singapore quotes, compared with $5.78 per barrel a day earlier.
Refining margins, or cracks, for 10 ppm gasoil fell to $31.79 a barrel over Dubai crude during Asian trading hours, the lowest since April 11. They were at $36.33 per barrel on Wednesday.
The front-month time spread for the benchmark gasoil grade in Singapore, narrowed its backwardation by 50 cents on Thursday to trade at $4.40 per barrel, Refinitiv Eikon data showed.
Singapore’s middle distillate inventories slipped 0.7% to a two-week low of 7.4 million barrels in the week to May 18, according to Enterprise Singapore data. This week’s onshore stocks were about 46% lower compared with the corresponding week a year earlier.
The June crack for 500 ppm Gasoil is lower at $30.50 /bbl with the 10 ppm crack at $31.50 /bbl. The regrade is at -$5.50 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s cash premiums for 380-cst high-sulphur fuel oil (HSFO) dropped on Thursday, plunging to their lowest level in more than two months, hurt by muted buying interests in the physical trade window. The cash premiums for 380-cst HSFO fell to $4.49 per tonne to Singapore quotes, a level not seen since March 17. They were at $5.16 per tonne a day earlier.
The cash differentials for 180-cst HSFO were at a discount of $2.91 per tonne to Singapore quotes on Thursday, compared with a discount of $3.49 a tonne on Wednesday.
The 380-cst HSFO barge crack for June traded at a discount of $14.72 a barrel to Brent on Thursday, as against minus $13.42 barrel in the previous session.
Cash premiums for Asia’s 0.5% VLSFO were at $36.75 a tonne to Singapore quotes, up from $33.84 per tonne a day earlier.
The front-month VLSFO crack, however, dipped to $26.11 a barrel against Dubai crude during Asian trading hours on Thursday, compared with $27.37 per barrel on Wednesday.
Singapore’s onshore fuel oil stocks rose 7.5% to 18.8 million barrels, or about 2.8 million tonnes, in the week to May 18, according to the Enterprise Singapore data. The onshore fuel oil inventories this week were 24.8% lower compared with the level a year-ago.
The June crack for 180 cst FO is higheat – $4.90 /bbl with the visco spread at $4.25 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh trades today.
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 refinery.
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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.