Crude Oil
Oil futures slipped on Tuesday as the market braced for reports expected to show swelling U.S. crude inventories.
Brent crude settled at $42.63 a barrel, down 45 cents. WTI crude futures settled at $40.37 a barrel, down 36 cents.
Prices rose early, after U.S. President Donald Trump wrote in a tweet late Monday that the trade agreement with China was “fully intact”. Markets had been unsettled by surprise comments from White House trade adviser Peter Navarro that the hard-won deal with China was “over”.
China will press the brakes on crude imports in Q3’20, after importing a record 11.3 MB/D of crude in May’20, with volumes set to rise in Jun’20 and Jul’20, as cheap crude purchased during an oil price slump in Apr’20 arrives in the country.
India’s oil imports in May’20 slowed to 3.18 MB/D (-31% MoM, -26% YoY), hitting the lowest since Oct’11 as refiners with brimming storage cut purchases after a continuous decline in fuel demand.
Yemen’s Iran-aligned Houthi movement fired missiles that reached the Saudi capital on Tuesday, the first such attack since a ceasefire put in place during the coronavirus epidemic expired last month.
api data
While the rise in crude stocks was unexpected, the draws in both gasoline and distillate stocks would point to an increase in consumption and therefore augur well for the future.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 478,949 (+5,465 DoD) yesterday, with the total number of confirmed infections at 9,345,569 (+162,994 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack rose for a fourth straight session to hit a 4-1/2 month high of $78.65 a tonne on Tuesday, pushed up by strong demand as fewer cargoes arrive from Europe and the United States.
The July crack has jumped to $1.15 / bbl.
Gasoline
Asia’s gasoline crack, at a premium of $4.57 a barrel to Brent crude, was marginally down by 0.4% from a 3-1/2 month high in the previous session but demand is slowly picking up across the world.
In China, May gasoline exports fell to 680 KT, data from the General Administration of Customs showed on Tuesday, versus 1.9 million tonnes in April and 850 KT tonnes in May of last year. .
The July crack is higher at $5.30 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10-ppm gasoil slipped to 67 cents a barrel to Singapore quotes on Tuesday, down from 75 cents per barrel a day earlier.
Cash discounts for jet fuel were at 81 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 64 cents on Monday.
The July crack for 500 ppm Gasoil is lower at $5.25 /bbl with the 10 ppm crack at $ 6.10 / bbl. The regrade is at -$ 3.15 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s low-sulphur and high-sulphur fuel oil markets were largely steady on Tuesday amid muted trade activity in the physical and paper markets. Ample supplies and tepid demand in the low-sulphur fuel oil market continue to weigh on sentiment.
The July crack for 180 cst FO is higher at – $3.05 /bbl with the visco spread at $1.20 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action 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 refinery.
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.