Oil prices fell about $1 on Thursday, with expectations building that reduced supplies from Venezuela and Iran could prompt OPEC to wind down output cuts in place since the start of 2017. Brent crude futures fell $1.01 to settle at $78.79 /bbl. U.S. West Texas Intermediate (WTI) crude futures fell $1.13 to settle at $70.71 /bbl.
Russia’s energy minister said he would discuss gradually scaling back oil production cuts with OPEC in June. He reiterated that they would stick to the status quo for now and that any potential decisions would have to be guided by the state of the market. Separately, the Saudi and UAE energy ministers will meet Russian President Vladimir Putin in St Petersburg tonight, at a meeting which is formally being held for international investors..
Asia’s naphtha crack improved marginally yesterday to $ 114.80 /MT, supported by strong demand. Cash premia for supplies in South East Asia are prevailing at mid teens to MOPJ quotes.
The June crack however, slipped back into negative territory and is valued at -$ 0.10 / bbl
Asia’s gasoline crack settled just one cent lower at $9.64 a barrel. However, demand stays firm with both Pertamina and an Indian Public Sector refiner seen in the market to buy cargoes.
Light distillate stocks in Singapore fell by 608 kb to 13.88 million barrels. Stock levels in Asia are still fairly comfortable though they have receded from the record highs seen in March.
The June crack has dropped to $ 11.60 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s 0.25 percent sulphur gasoil cash discounts to Singapore prices widened to $2.40 a barrel on Thursday from $1.80 a week ago, reflecting high overall supplies.
Singapore’s onshore middle distillates stocks jumped 12.7 percent or 932,000 barrels to 8.265 million barrels in the week to May 23,the highest in four weeks. This more or less mirrors the rise in stocks in Fujairah and could temporarily put a cap on refining margins
The June crack is steady at $ 15.45 / bbl with the 10 ppm crack quoting higher at $ 16.45 /bbl. The regrade has also dropped to $ 0.50 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Weighed down by higher crude prices, Asia’s June 180-cst fuel oil crack to Brent crude slipped to a near one-week low on Thursday. Despite recent losses, fuel oil crack discounts were still at relatively narrow levels when compared to recent gains in crude oil prices. Fuel oil cracks have been supported by rising seasonal demand for cooling in the summer and tighter supplies amid refinery maintenance and outages in key producing regions. The June 180-cst crack narrowed its discount to Brent crude to $7.27 a barrel on Thursday, down from minus $7.08 a barrel in the previous session. The June 380-cst fuel oil crack to Brent crude was trading at a discount of about $11.35 a barrel on Thursday.
Singapore’s weekly onshore fuel oil stocks slipped by 332,000 barrels to a three-week low of 18.341 million barrels.
Heavy distillate stocks in Fujairah rose by 1.34 million barrels in to 9.2 million barrels. This is just higher than the level last year.
The June 180 cst crack is lower at -$ 4.65 / bbl. The visco spread has widened to $ 1.55/bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Our 2019 positions for Gasoil and Jet seem to be improving slightly. as Gasoil eases in the prompt. However, 2019 is far away and anything could happen.
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.
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.