Oil prices built on recent gains on Friday on fears any U.S. military attack on Iran would disrupt flows from the Middle East. Brent crude futures rose 75 cents to settle at $65.20 a barrel. WTI crude futures rose 80 cents to settle at $57.45 a barrel.
U.S. President Donald Trump said on Saturday he would impose fresh sanctions on Iran but that he wanted to make a deal to bolster its flagging economy, an apparent move to defuse tensions following the shooting down of an unmanned U.S. drone this week by the Islamic Republic. Military action was “always on the table,” the president said, but he added that he was open to quickly reaching a deal with Iran that he said would bolster the country’s flagging economy.
Iran reiterated its interest in trading oil with Russia, with Moscow proposing a “trade cooperation,” state television news agency iribnews.ir reported Sunday, citing Central Bank of Iran Governor Abdolnasser Hemmati. Iran and Russia already have a deal whereby Iran sells 100,000 b/d of crude oil to Russia and receives 50% of the value in cash and 50% in equipment. Hemmati indicated that Iran has lost hope in using INSTEX, a European-established trade channel that promised a non-cash, non-dollar oil trade with Iran, among other commodities. Hemmati said Iran plans to increase oil exports to counter a cash shortage.
U.S. energy firms increased the number of oil rigs operating for the first time in the past three weeks as U.S. crude futures soared around 10% this week. Companies added one oil rig in the week to June 21, bringing the total count to 789, Baker Hughes said in its closely followed report on Friday. That compares with 862 rigs operating during the same week a year ago.
Asia’s naphtha crack eased to a two session low of $23.33 a tonne on Friday after hitting a month’s high in the previous session.
The July crack is higher at -$ 6.00 /bbl
Asia’s gasoline margins rose to a four week high of $3.71 a barrel as a draw down in inventories in the West provided support.
Gasoline stocks in ARA were also down by around 5% to a two week low of 1.166 million tonnes in the week to June 20.
China’s gasoline exports fell 42.4 % in May from a year earlier and diesel shipments fell 37.8 %, customs data showed on Sunday. The export declines came even as a fuel glut in China worsened in the second quarter of the year as massive new refining facilities came on line, while demand for fuel, especially gasoline, slowed alongside declining sales of new cars.
The July crack has jumped to $ 6.10 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash differentials for 10ppm gasoil were at a premium of 1 cent a barrel to Singapore quotes, down from 2 cents per barrel a day earlier. The gasoil cash differentials flipped back to narrow premiums on Thursday, for the first time in nearly three weeks.
The East West gasoil EFS, which determines the gasoil price spread between Singapore and North West Europe, was around minus $11 per tonne on Friday. The arbitrage is usually profitable when the EFS trades at minus $15-18 a tonne or below.
Gasoil stocks independently held in ARA fell 5.7% to about 2.8 million tonnes in the week to June 20. This is about 42% higher than the same time last year.
Cash differentials for jet fuel were at a discount of 10 cents a barrel to Singapore quotes on Friday, compared with a discount of 15 cents a barrel in the previous session.
At least 480 KT of jet fuel are loading between June 18 and the end of the month in Asia and the Mideast Gulf to head to northwestern Europe, some with options to go elsewhere.
ARA jet fuel inventories rose 1.1% to 841,000 tonnes in the week to Thursday. Compared with year ago levels, jet fuel stocks were up about 27%.
The July crack for 500 ppm Gasoil is higher at $ 14.45 /bbl with the 10 ppm crack at $ 15.15 / bbl. The regrade is at +$ 0.20 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
The front month 380 cst high sulphur fuel oil (HSFO) barge crack narrowed its discount to Brent crude on Friday despite sharp gains in benchmark crude prices.
The July 380 cst barge crack was at $8.18 a barrel below Brent crude, up from minus $8.63 a barrel in the previous session.
Fuel oil inventories in ARA rose 1% to a three week high of 1.07 million tonnes in the week ended June 20. However, ARA fuel oil inventories were 30% lower than year ago levels, and were below the five year average of 1.115 million tonnes for this time of the year.
The July180 cst crack is stronger at – $ 1.00 / bbl with the visco spread at $ 1.60 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
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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.