Crude Oil
Crude prices rose more than 1 percent on Wednesday to their highest level this year after signs of progress on US China trade talks emerged and strengthened equity markets on Wednesday. Brent crude rose 63 cents to settle at $67.08 a barrel. U.S. crude was up 83 cents at $56.92 a barrel. The more active April contract settled at $57.16, up 71 cents.
API Data
The API data, coming out a day later than usual was mildly bullish as it reported lower crude bills than anticipated and a higher gasoline draw than expected as well. Distillate stocks, however, drew less than expected. The gasoline draw is not a serious issue given the ample surplus of stocks around the globe.
Naphtha
Asia’s naphtha crack for front-month first-half April rose by more than $5 to a 2-1/2 week high of $44.75 a tonne on Wednesday demand for the fuel for April emerged.
YNCC was amongst the first in South Korea to pick up naphtha for first-half April delivery through a tender. It paid a premium of about $4 a tonne to Japan quotes on a cost-and-freight (C&F) basis. This was double the $2 a tonne premium YNCC had paid on Jan. 24 for cargoes scheduled for first-half March arrival at Yeosu.
The March crack is higher at -$ 6.85 /bbl
Gasoline
The discount on the Asian gasoline crack was also lower, with the discount narrowing to 10 cents a barrel versus 35 cents in the previous session. This was also the highest gasoline crack value in over a week.
Gasoline stocks in Japan rose 200,000 barrels to 10.93 million barrels in the week to Feb. 16. Light distillates stocks in Fujairah were at a three-week high of about 11.4 million barrels in the week to Feb. 18..
The March crack is higher at $ 0.90 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash differentials for 10 ppm gasoil edged higher on Wednesday, helped by stronger buying interests in the Singapore physical market, while the front-month time spread narrowed its contango structure.
The benchmark gasoil cash differentials narrowed their discounts to 36 cents a barrel to Singapore quotes on Wednesday, compared with a discount of 42 cents a barrel on Tuesday. The March/April spread narrowed by 2 cents to a discount of 10 cents a barrel on Wednesday.
Middle distillate stocks in Fujairah rose by 35 kb to 2.4 million barrels.
Cash discounts for jet fuel remained unchanged at 30 cents a barrel to Singapore quotes on Wednesday.
The March crack is unchanged at $ 13.90 /bbl with the 10 ppm crack at $14.90 /bbl. The regrade is lower at – $ 0.25 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Sentiment in the fuel oil market continued to soften as ample supplies weighed on cash premiums, refining margins and time spreads.
Cash premiums of Asia’s 380-cst high-sulphur fuel oil (HSFO) fell for a fourth session straight to a more than eight-month low of $1.98 per tonne to Singapore quotes as suppliers accepted lower deal values for cargoes of the fuel.
Premiums of the front-month 380-cst HSFO time spread also fell to a two-month low of $2 per tonne, down from $2.75 a tonne in the previous session. Refining margins also inched lower despite weaker crude oil prices on Tuesday.
The February 180-cst fuel oil crack to Dubai crude was its narrowest premium in almost two weeks at plus 50 cents a barrel on Tuesday, down from plus 85 cents a barrel in the previous session.
Fuel Oil stocks in Fujairah rose by 400 kb to 8.2 million barrels.
The March180 cst crack has dropped to $ 0.55 / bbl with the visco spread at $ 0.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh hedges for 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 refiner.
Click Here to see how all our recommendations have fared
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.