Crude Oil
Oil prices eased after first touching $75 /bbl for the first time in nearly six months. Brent crude futures fell 22 cents to settle at $74.35 a barrel. WTI futures fell 68 cents to settle at $ 65.21 a barrel.
Brent touched $75 per barrel on Thursday on the suspension of some Russian crude exports to Europe. However, investors are wary about the market’s ability to rally further.
Poland and Germany suspended imports of Russian crude via the Druzhba pipeline, citing contamination. The pipeline can ship up to 1 million barrels per day, or 1 percent of global crude demand, and about 700,000 bpd of flow was suspended, according to trading sources and Reuters calculations.
Russia, the world’s second-largest crude exporter, said it planned to start pumping clean fuel to Europe through the pipeline on April 29.
China has issued additional crude oil import quotas of 4.31 million tonnes to seven independent refiners to be used for 2019, two sources with knowledge of the matter said on Thursday
Naphtha
Asia’s naphtha crack extended its losses for the second day to reach a three-session low of $56.32 a tonne on muted demand.
The May crack is steady at – $ 5.55 /bbl
Gasoline
Asia’s gasoline crack fell to $6.01 a barrel, its lowest since March 13. High oil prices have weighed on light distillates crack levels.
SK Innovation, owner of South Korea’s top oil refiner SK Energy, however said it expected refining margins to improve on the back of firm diesel demand and seasonal appetite for gasoline. This came a day after S-Oil, South Korea’s third-biggest refiner by capacity, said tighter supply of refined products on a string of refinery outages and seasonal gasoline demand were expected to help refining margins improve in the second quarter.
Singapore’s light distillates inventories in the meantime were at a four-month low of 14.4 million barrels in the week to Wednesday, official data showed.
The May crack is marginally higher at $ 7.00 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for gasoil with 10 ppm sulphur content narrowed to 16 cents a barrel to Singapore quotes, compared with a discount of 17 cents a barrel on Wednesday.
Cash discounts for jet fuel were at 26 cents a barrel to Singapore quotes, compared with a discount of 35 cents per barrel on Wednesday.
Middle distillate stocks in Singapore dropped by 1.2 million barrels to 9.34 million barrels, a nearly 6 month low.
The May crack for 500 ppm Gasoil is higher at $ 11.75 /bbl with the 10 ppm crack at 12.40 / bbl. The regrade is higher at $ 0.25 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Strong buying interest on Thursday boosted 380-cst high-sulphur fuel oil (HSFO) cash differentials and front-month barge cracks. Cash differentials for 380-cst HSFO flipped to a narrow premium of 6 cents per tonne to Singapore quotes on Thursday, a near one-month high, up from a discount of $1.33 per tonne in the previous session.
The May 380-cst barge crack was at about minus $6.36 a barrel against Brent on Thursday, up from minus $7.18 a barrel in the previous session, and its narrowest discount since two weeks. This came despite surging crude prices.
Singapore fuel oil inventories climbed to a 16-month high in the week ended April 24, lifted by higher net import volumes of the fuel compared to the previous week, official data released on Thursday showed.
The May 180 cst crack is stronger at – $ 1.2 / bbl with the visco spread at $ 1.80 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
The spike in fuel oil cracks notwithstanding the jump in stock to multi month highs is a bit baffling. We will add a tranche of the July crack at – $ 0.60/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 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.