Crude Oil
Oil prices gained on Thursday as the risk of renewed U.S. sanctions on Iran, plunging Venezuelan output, and robust global demand shook off the effects of a strong dollar. Brent crude oil futures gained 74 cents to settle at $74.74 /bbl, while U.S. crude futures gained 14 cents to settle at $ 68.19 /bbl.
United States Defence Secretary,James Mattis told a Senate Armed Services Committee hearing that that the 2015 Iran nuclear deal was “an imperfect arms control agreement” with certain aspects that could be improved upon, but reiterated that staying in it was in the US’ national security interest.
A top adviser to Iran’s supreme leader said Tehran would not accept any change to the 2015 nuclear deal, as Western signatories prepare a new package in the hope of persuading U.S. President Donald Trump to stick with the accord. This comes a day after French President Emmanuel Macron said he expected Trump to pull out of the agreement.
The US dollar hit 91.365 against a basket of currencies, its highest since mid-January.
Venezuelan oil output has already tumbled forty percent in two years, and the European Union said earlier this month it could impose further sanctions on Venezuela if it believes democracy is being undermined there.
Seaborne imports of crude by Asia’s main buyers will hit a record this month. By end-April, China will likely have taken in more than 9 million bpd of crude its most ever and nearly 10 percent of global consumption.
For detailed charts on crude and product stocks, please visit our US Department of Energy Data page
Naphtha
Asia’s naphtha crack eased yesterday after 4 straight days of gains to $77.97 /MT arguably due to high crude prices. However, the front month time spread of $ 12.25 / MT reflected the strength in the market amply. This is the highest backwardation seen in the last fortnight. Premiums are reported to have climbed back to the mid teen levels, which were levels seen at the start of the month.
The May crack is slightly higher at -$ 1.05 /bbl
Gasoline
Asia’s gasoline crack continued to fall to $6.13 /bbl. Light distillates stocks held in Singapore eased by 403 kb to 13.21 million barrels. Gasoline stocks in ARA too fell by 81 KT to 1.17 Million tons.
The May gasoline crack has improved to $ 10.60 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian cash premiums for jet fuel and 10ppm gasoil edged higher on Thursday on tighter market fundamentals.Cash differentials for jet fuel rose to $1.18 a barrel to Singapore quotes, compared with $1.17 on Wednesday.
Meanwhile, cash premiums for gasoil with 10 ppm sulphur content edged up to 49 cents a barrel to Singapore quotes, from 48 cents on Wednesday.
While the increase in premia was marginal, the front-month spreads for both jet fuel and 10ppm gasoil widened their backwardated structure on Thursday.
Singapore onshore middle-distillate stocks declined by 1.4 million barrels to 8.3 million barrels in the week to April 25. Overall, onshore middle-distillate inventories were 31.5 percent lower than a year ago. Stocks in ARA also fell by 163 KT to 2.1 million tons. This is the lowest level since October 2017.
The May gasoil crack has strengthened to $ 15.55 /bbl with the 10 ppm crack at $ 16.20 /bbl. The regrade is at $ 0.90 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Bullish sentiment continued to support Asia’s fuel oil market on Thursday amid ongoing concerns of tight supplies of finished grade bunker fuels and after official data showed Singapore fuel oil stocks dropped to a more than 3-year low. The 380-cst fuel oil front-month time spread firmed to about $2.20 a tonne on Thursday. The 380-cst fuel oil barges crack to Brent crude also narrowed its discount to about minus $12.85 /bbl before the Singapore trading window but later gave up gains to about minus $13.30 a barrel as crude prices climbed.
Singapore fuel oil inventories were 546,000 barrels lower than the week before at 17.39 million tons and were at their lowest since the week to Nov. 27, 2014. ARA stocks too dropped to 793 KT, their lowest levels since May 2017.
The May 180 cst crack has further strengthened to -$ 6.05/ bbl. with the visco spread increasing to $ 1.70 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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.