Oil prices ended Wednesday higher after a volatile trading session on concerns that the United States will not consider additional concessions to Iran in its response to a draft agreement that would restore Tehran’s nuclear deal – and potentially the OPEC member’s crude exports.
Brent settled up $1, or 1%, at $101.22. The global crude benchmark has rallied since hitting a low of $91.71 six days ago. Recession fears aside, one reason for Brent’s relative underperformance against WTI on Wednesday was the superior export performance of U.S. crude versus global competing oils, said traders.
WTI was up $1.15, or 1.2%, at $94.89 per barrel. WTI has rallied with few stops since hitting a near six-month low of $85.73 on Aug. 16.
API Data
Nearly one day’s U.S. production — that’s what total oil exports out of the United States for last week were, reaching a record of 11.1 million barrels, government data on Wednesday showed. It is these kinds of numbers that are propping the market.
On the flip side, showed lackluster demand for gasoline, which augurs for a notable slowdown in economic activity. Gasoline demand data showed the four-week average of daily gasoline product supplied 7% below the year-earlier period.
The Material Balance continues to remain out of sync with reported figures for crude stocks. Having said that, it is good to remember that crude inventories should have been depleted far more than reported.
Asia’s naphtha crack in the region dipped to the lowest in more than two months to a discount of $66.38 a tonne from a discount of $45.33 in the last session amid weak demand from petrochemical facilities.
The September crack is lower at -$ 20.55 per barrel
Asia’s gasoline crack declined on Wednesday after U.S. inventories rose and crude oil benchmarks strengthened.
The refining profit margin for gasoline dropped to $10.67 a barrel from $14.34 a barrel on a day earlier.
Light distillate stocks at the Fujairah Oil Industry Zone (FOIZ) declined by 181,000 barrels to 8.422 million barrels in the week ended Aug. 22, S&P Global Commodity Insights data showed.
The September crack is much lower at $7.95 per barrel.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s refining margins for gasoil with 10 ppm sulphur content dipped on Wednesday after stronger crude prices, a bigger-than-estimated rise in U.S. stocks and a dearth of trades at the physical window weighed on sentiment.
Cash differentials for 10 ppm gasoil rose to a premium of $1.51 a barrel to Singapore quotes, up from $1.40 in the previous session.
Refining margins or cracks for 10 ppm gasoil fell to $51.40 a barrel over Dubai crude in Asian trading hours, compared with $52.72 on Tuesday.
Cash differentials for jet rose to a premium of 29 cents a barrel to Singapore quotes, up from a premium of 17 cents a barrel in the previous session.
Refining margins for jet fuel fell to $45.50 a barrel over Dubai crude during Asian trading hours, compared with $46.62 on Tuesday.
Stocks of middle distillates at the Fujairah Oil Industry Zone fell by 120,000 barrels to a five-week low of 2.808 million barrels in the week to Aug. 22, S&P Global Commodity Insights data showed.
The September crack for 500 ppm Gasoil is higher at $52.30 /bbl with the 10 ppm crack $56.30 /bbl. The 10 ppm regrade is at -$5.90 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s spot fuel oil market eased further on Wednesday as supplies are expected to remain plentiful into early September.
The 180-cst high sulphur fuel oil (HSFO) cash differential fell $2.63 to $3.70 per tonne over Singapore quotes on Wednesday, with more offers for 180-cst HSFO emerging versus the previous day. Meanwhile, the 380-cst HSFO cash differential inched 36 cents lower to $3.97 per tonne.
The 0.5% VLSFO cash differential declined 84 cents to a premium of $13.03 per tonne over Singapore quotes on Wednesday.
Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues fell 14% from the previous week to 10.56 million barrels (1.66 million tonnes) in the week ended Aug. 22, hitting a nine-week low, latest data from S&P Global Commodity Insights showed.
The September crack for 180 cst FO is lower at – $20.25 /bbl with the visco spread at $3.00 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
We shall hedge the 4Q22 10 ppm Dubai crack at current levels of $ 51.40 per bbl. We shall also hedge the Cal 23 10 ppm Dubai crack at current levels of $ 34.80 per bbl
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.