Oil prices were mixed on Monday, as concerns about a slowdown in global economic growth lingered, offset by the prospect of tighter U.S. crude supply. Brent crude oil futures settled at $67.21 a barrel, up 18 cents, while U.S. crude fell to $58.82 a barrel, down 22 cents.
Oil prices took a hit last week after cautious remarks by the U.S. Federal Reserve and weak factory data from the United States, Europe and Asia led to the inversion of the U.S. Treasury yield curve for the first time since 2007. Three-month Treasury bills currently yield more than 10-year notes. An inverted yield curve, where long-term rates fall below short-term ones, has historically pointed to a looming recession, as it reflects investor belief in greater short-term risk.
An improved index on Germany’s business climate dispelled some recession concerns that flared after manufacturing output from Europe’s biggest economy shrank for the third straight month.
Asia’s naphtha crack eased by 37 cents to a two-session low of $61.98 a tonne on Monday, tracking losses in Singapore’s gasoline crack., which. Fundamentals remain better than a month ago when the naphtha and gasoline cracks were 49 percent and more than 10 times lower respectively, which was reflected in spot premiums.
Taiwan’s Formosa Petrochemical Corp paid a premium of about $4 a tonne to its own price formula for 100 KT tonnes of open-specification naphtha for delivery in the first half of May. This was about four times the premium it paid on March 14 for similar naphtha grades scheduled for delivery in the second half of April.
The April crack is higher at -$ 4.75 /bbl
Asia’s gasoline crack was also at a two-session low of $7.58 a barrel from $7.68 a barrel on Friday.
Gasoline demand has been firm recently thanks to elections in India and Indonesia and heavy refinery maintenance in parts of Asia, which helped to tighten supplies. Demand for petrol has also been strong in the United States, with a huge draw on inventories recently.
The April crack is lower at $ 6.95 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash discounts for 10ppm gasoil were at 22 cents a barrel to Singapore quotes, as against a 20-cent discount on Friday.
The gasoil EFS was around minus $12 a tonne on Monday, the widest in slightly over a week.
Cash differentials for jet fuel were at a discount of 33 cents a barrel to Singapore quotes on Monday, compared with a discount of 37 cents per barrel on Friday.
The April/May time spread for jet fuel was at a discount of 22 cents a barrel on Monday, compared with Friday’s 30 cents per barrel.
The April crack for 500 ppm Gasoil is higher at $ 13.15 /bbl with the 10 ppm crack at 14.10 / bbl. The regrade is higher at +$ 0.45 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Despite weaker benchmark crude oil prices, the front-month 380-cst fuel oil barge crack’s discount to Brent crude widened on Monday, to their widest in more than two months as ample supplies and sluggish prompt demand continued to weigh.
The April 380-cst barge crack was at minus $5.35 a barrel against Brent, down from minus $4.95 a barrel on Friday. The front-month crack was last lower on Jan. 21.
The April 180 cst crack is lower at – $ 0.65 / bbl with the visco spread at $ 1.10 cents/bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
The Cal-20 cracks are once again rising. Should the Jet crack exceed $ 20 / bbl, we will reinstate our hedge for Cal-20 Jet crack.
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.