Crude prices rose as much as 3% on Tuesday, rebounding after a three-day slide that took a barrel to below the $100 support, triggering short-covering.
Brent crude futures settled up $2.67, or 2.6%, at $104.99 per barrel.
WTI crude futures settled up $3.16, or 3.2%, at $101.70 in Tuesday’s trade.
“The $95 low on WTI has been a tough nut to crack and since we went there yesterday, without really going below it, it triggered a wave of short-covering,” said John Kilduff, founding partner at New York energy hedge fund Again Capital.
The API data showed some surprises with strong builds in crude and distillate stocks. However the significant draw in gasoline stocks would hold some hope for the bulls.
At a global level, the death toll from the COVID-19 virus rose to 6.25 Million (+2,806 DoD) yesterday. The total number of active cases fell by 1.23 Million DoD to 40.44 million. (Click here for details).
Asia’s naphtha crack rebounded on Tuesday after falling sharply in the previous session, and the market flipped into contango with the inter-month spread at $1 a tonne for the first time since August 2021.
The crack rose to $99 a tonne, up $12.28 from the last close, buoyed by hopes of an increase in blending demand due to strength in the gasoline complex.
The May crack is higher at -$ 2.10 per barrel
Asia’s gasoline crack hit a fresh peak of $21.80 a barrel, up from Monday’s $19.14, on prospects of rising demand amid Ramadan festivities in Indonesia.
The May crack is higher at $24.40 per barrel.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asian jet fuel refining margins climbed on Tuesday, buoyed by recovering aviation demand in the region, especially as airlines in China added capacity to their schedules this week.
Cash premiums for jet fuel rose to $1.20 a barrel to Singapore quotes on Tuesday, compared with $1.13 a barrel in the previous session.
Refining margins, or cracks, for jet fuel rose to $31.93 per barrel over Dubai crude during Asian trading hours, up from $30.04 per barrel a day earlier.
“Both Thailand and Singapore removed all remaining travel restrictions for vaccinated travellers last week and despite Shanghai entering a fifth week of lockdowns the Chinese aviation market has seen some capacity added back in the last seven days.”.
Global airline capacity increased by 3.3% this week to 88.6 million seats, the highest so far this year, while capacity in South Asia this week was 9.1% higher compared with the corresponding week in pre-pandemic 2019, according to OAG.
Total scheduled airline capacity in Northeast Asia in the week to Monday rose 10.8% from the previous week, while scheduled seats in Central Asia jumped 20.7%, OAG data showed.
The May crack for 500 ppm Gasoil is higher at $45.80 /bbl with the 10 ppm crack at $45.80 /bbl. The regrade is at -$10.00 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s cash premiums for 380-cst high-sulphur fuel oil (HSFO) climbed on Tuesday, hovering close to their highest level in more than two years, riding on firmer seasonal demand amid tight supplies.
The cash differentials for 380-cst HSFO rose to a premium of $26.55 per tonne to Singapore quotes, up from $26.26 per tonne a day earlier. The premiums have more than doubled in the last month.
The cash premiums for 180-cst HSFO were at a premium of $37.58 per tonne to Singapore quotes on Tuesday, compared with $37.69 per tonne on Monday.
The front-month barge crack for 380-cst HSFO traded at a discount of $13.58 a barrel to Brent on Tuesday, compared with minus $14.17 a barrel in the previous session.
Meanwhile, the front-month VLSFO crack dipped to $20.40 per barrel against Dubai crude during Asian trading hours, compared with $20.54 per barrel on Monday.
Cash premiums for Asia’s 0.5% VLSFO dropped to $21.21 a tonne to Singapore quotes on Friday, up from $22.15 per tonne a day earlier.
The May crack for 180 cst FO is higher at $4.05 /bbl with the visco spread at $4.60 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
We shall lay on a tranche of 180 cst – Dubai for May at current levels of $ 4.60 / 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 refinery.
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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.