22 Mar 2017
oil-barrel

Crude Oil

The bulls fought a losing battle against the shadow of excess stocks looming over the US yesterday.  Brent lost 66 cents to close at $ 50.96 / bbl.  The expiring WTI futue lost 88 cents to settle at $ 47.34 /bbl.  The May future, which becomes front month today, settled at $ 48.24 /bbl.

API data reported that Oil stocks had increased by 4.5 Million barrels to 533.6 Million barrels.  Gasoline stocks dropped by 4.93 million barrels and distillate stocks dropped by 880 KB. Should the stock build be verified by EIA (stocks as of last week were reported at 528.2 million barrels), we should see the psychological level of $ 50 /bbl also being tested.

Technically, Brent prices have now dropped below the 200 DMA on the charts and are hovering around the 50 Week Moving Average.

For crude stocks to draw significantly, we need refinery runs in the US to increase significantly.  This should be happening any time soon as product stocks have been drawing through the last 3 – 4 weeks.  That is when we would arguably begin to see crude prices being supported.

Naphtha

Several buyers were seen in the market yesterday looking for cargos.  However, this has failed to impact the naphtha crack significantly. The MOPJ crack for April is valued at $ 0.85 /bbl down 5 cents over yesterday.  The Singapore crack for April is at -$ 0.9 /bbl, surprisingly up 5 cents.

Gasoline 

Gasoline supplies appeared ample.  The outlook for gasoline cracks does not look very optimistic. Russia’s gasoline exports increased by 15% last year in the wake of major refinery upgradation and dropping gasoline demand. Having said the above, the gasoline crack for April improved in value to $ 11.25 /bbl.

Middle Distillates

Gasoil cracks showed some improvement as well notwithstanding ample physical supplies.  The April crack is valued at $ 11.15 / bbl.  The regrade value for April has also improved  -$ 0.3.  This could be the beginning of a turn around, and we would recommend a cautious trade to buy the regrade for April and May
180 CST Fuel Oil
Fuel Oil crack have strengthened marginally as well notwithstanding the supply overhang in the market. Total supplies into Asia for March were expected to touch 7.7 million tons for the third month in  a row . The April crack is valued at  -$ 4.05/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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