21 Mar 2017
oil-barrel

Crude Oil

Crude were extremely well supported during the trading day yesterday notwithstanding the fact that prices settled marginally lower.  Brent lost 14 cents to close at $ 51.62 / bbl. WTI lost a lot more, i.e. 56 cents to settle at $ 48.22 /bbl.  This is probably due to the fact that the WTI front month future expires today.

Markets briefly surged into positive territory on reports that OPEC increasingly favor extending cuts beyond June 2017.  However, this would be subject to non OPEC producers following suit.

We have consistently been maintaining that price rises from here on have to be demand driven.  With refining margins in Asia (the highest growth market) consistently declining since January 2017, we do not see any radical demand for products which will compel refineries to run at these low margins.

Having said that, the bull traders have managed to keep prices from dropping yesterday.  We do not expect any significant movement in prices, especially downward, until the API data figures are published after close of trading today.

Naphtha

Demand for physical Naphtha eased out significantly as the market now expects supplies of the order of 1.4 million tons in April, up from a prior estimate of 1.1 million tons. Further, with winter coming to an end, LPG is also expected to be availabe for cracking. The MOPJ crack for April is valued at $ 0.9 /bbl.  The Singapore crack for April is at -$ 0.95 /bbl.

Gasoline 

Gasoline cracks strengthened significantly today.  The immediate reason for the strengthening is not known. The April crack is valued at $ 10.8 /bbl.

Middle Distillates

Gasoil cracks continued to ease marginally.  The physical markets saw ample supply from India in the form of a term contract from Indian Oil for high sulfur crude. This could be due to India shifting to a Euro IV standard equivalent through the country from April.  Further, many buyers either cancelled their purchase requirement or cut them down drastically due to adequate supplies. The April crack is valued at $ 10.95 / bbl.  Regrade value for April is around -$ 0.4.
180 CST Fuel Oil
Fuel Oil cracks have eased significantly as buyers appear to have stayed on the sidelines anticipating lower crude prices. Both Europe and Singapore are already awash with stocks. The April crack is valued at  -$ 4.15/bbl today.

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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