Crude Oil
Crude closed up on Monday with Brent settling $0.26 higher at $53.87 per barrel and WTI settling $0.80 higher at $51.13 per barrel. The higher gains in WTI vis a vis Brent brought the Brent-WTI differential down to $2.74 /bbl, much lower than the average of $2.95 /bbl seen this month.
Oil is trading lower today after U.S. President Donald Trump proposed the sale of half the country’s strategic oil reserves in his budget plan. According to the plan, the U.S. would gradually sell off half of its emergency oil stockpile to raise $16.5 billion from October 2018. However, this proposal should be taken with a pinch of salt as Presidential budgets are often ignored by the U.S. Congress, which controls the federal purse strings.
In other news, the OECD said in a statement that “Quarterly growth of real gross domestic product (GDP) in the OECD area decelerated sharply to 0.4 percent in the first quarter of 2017, compared with 0.7 percent in the previous quarter, according to provisional estimates.” This slowdown in the GDP will have an impact of oil demand and consequently on prices.
Naphtha physical markets continue to remain weak amid poor demand and adequate availability. The interest in the window was also lackluster with no deals having been concluded yesterday.
The June Japan Naphtha- Dubai crack is down at -$1.55 /bbl.
Gasoline
Gasoline cracks moved slightly lower with fewer buyers and sellers visible in the market. Two deals were reported in the Platts Trading Window.
The June crack is lower at $ 10.80 today.
Distillates
Gasoil cracks continued to strengthen on the back of strong demand from India. As per the latest news, it is IOC which is now seeking about 80,000 MT of 40 ppm diesel due to the delay in restart of its refineries under maintenance. Adding to the strength in gasoil cracks is the expectations of higher diesel demand emanating from South Africa after a blast in Natref Refinery, its only inland oil refinery. India is typically a supplier of diesel to South Africa from Asia.
The crack is valued at around $ 10.60 /bbl for June. The regrade continues to be valued at 35 cents/bbl today.
Fuel Oil
Sentiment in Asia’s fuel oil market continues to be bearish . While recent onshore fuel oil inventories in Singapore have fallen below average levels since the start of the year, traders are of the view that sentiment was weighed down by concerns that supplies could quickly bounce if inventories stored recently aboard vessels around the city-state are reintroduced.
The June 180cst-Dubai crack was lower at -$ 3.95 / bbl. The Visco spread is also down at at $ 1.20 / bbl
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.