Crude Oil
Oil prices fell on Thursday as investors took profits after this week’s rally and as U.S. stock markets fell. Brent crude fell 56 cents to settle at $68.91 / bbl. WTI futures also fell 87 cents to settle at $ 64.30 /bbl.
The fall was limited as the underlying causes for bullish sentiment still remain intact. However, uncertainty would prevail going ahead as the prospects of a trade war loom
The US has imposed 25% import duty on Chinese goods worth US$ 25 Billion. In retaliation, China has planned to 25% duty on $ 3 billion of US imports. This would be in addition to pursuing legal imports at the World Trade Organization.
Naphtha
The backwardation in Asia’s naphtha open-specification naphtha for first-half May versus first-half June rose to $9.50 /MT, the strongest since January 10. While supplies seem constant and limited, more buyers were emerging.
The April crack is steady at – $ 0.30 /bbl .
Gasoline
Asia’s gasoline crack slumped to $ 7.27/bbl yesterday. This is the lowest level since February 23.
Singapore light distillate stocks fell by 284 kb to 14.6 million barrels. Nevertheless, stocks are 8.7% higher than last year.
While gasoline inventories in the US have fallen last week inspite of US refineries operating at 92% of capacity (a 20 year seasonal high!), the rest of the world seems awash with stocks. Yesterday, Fujairah reported a build of nearly 1 million barrels. Japan too has reported stock levels of 10.77 million barrels, a five week high.
The April crack is marginally higher at $ 11.65 /bbl .
Distillates
Asia’s cash differentials for gasoil with 10ppm sulphur content edged a cent lower on Thursday as onshore Singapore middle distillate stocks climbed to a 3-1/2 month high, but market participants were hopeful about a demand uptick over the next few weeks. The cash differential of Asia’s 10ppm gasoil was at 25 cents a barrel to Singapore quotes, down from 26 cents on Wednesday.
Winter heating demand for kerosene may have ebbed in the past couple of weeks, but aviation fuel prices will benefit from supply tightness due to refinery maintenance and summer travelling demand.
Singapore onshore middle distillate stocks rose 18.5 percent to 10.6 million barrels in the week to March 21, the highest in 3-1/2 months. This is still roughly 20% below last year’s levels. It may well have been higher
The April gasoil crack has eased to $ 14.30 /bbl with the 10 ppm crack at $ 15.05 /bbl. The regrade is higher at $ 0.50 /bbl.
Fuel Oil
Asia’s 380-centistoke (cst) fuel oil cash differential slid to its widest discount since July 2016 on Thursday, as suppliers in the Singapore trading window lured buyers with lower price levels. Cash discounts for 380-cst fuel oil fell to minus $1.94 a tonne to Singapore quotes, from a discount of $1.20 per tonne in the previous session. Aggressive offers from suppliers of the 380-cst bunker fuel with some seeking to clear their landed inventories, also weighed on ex-wharf and delivered differentials.
Singapore weekly onshore fuel oil inventories rose 349 KB to a fresh 2018 high of 24.22 million barrels in the week ended March 21. Compared with year-ago levels, the latest onshore fuel oil inventories were 11 percent lower.
The April 180 cst crack has has marginally improved to -$ 5.90 / bbl with the visco spread widening to $ 1.30 /bbl
Hedge Recommendations
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.
Today’s status of active recommendations is below.
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.