Crude continued to drop on Friday. However, the drop was contained by reports that crude has moved out of storage and therefore, global overhang of inventories has actually depleted. Brent lost 59 cents to close at $55.99 /bbl while WTI fell by 46 cents to settle at $ 53.99 /bbl.
Reuters reports the removal of close to 12 million barrels of crude out of tankers from the Singapore-Malaysia area suggesting that the production cuts may be having effect. However, there is another interpretation to this data, that being that the contango in the price structure is not sufficient to keep storage viable any more.
OPEC continues to make appropriate statements about adherence to cuts etc. However, we are yet to see data to that effect.
In other news, the Baker Hughes rig count went up by 6 to 602 rigs, the highest since October 2015 and, as long as prices stay stable to firmly higher, should go on increasing.
Technical Analysis (charts source : Oilprice.com)
If we take a look at the volumes over the last three days on the daily charts, we can see that volumes on downturns have been higher than those on upturns. This seems to suggest some sort of peaking..
The weekly chart shows another spinning top which means that the jury is still out on the directions likely to be taken by Oil Prices. However, the MACD has crossed from +0.02 the previous week to – 0.02 this week. The crossover represents a signal that bullishness may have peaked.
The support still remains at $ 55 / bbl with the resistance just above $ 58 / bbl. Crude has been trading in the $ 54 – $58 range for the year till date.
The naphtha crack continued to recover albeit slowly on Friday. The March MOPJ crack is valued at $ 1.40 / bbl. The Singapore crack for March is valued at + $ 0.10 /bbl.
The gasoline crack too continued its recovery. The March crack valued at just over $ 12.0/bbl.
Gasoil cracks have started the week 25 cents lower with the March crack being valued at $12.55 / bbl . The regrade continues to languish at -$0.75 /bbl. Even the April regrade has slipped into negative territory.
Fuel Oil was steady in the window on Friday. However, the week has begun with optimism on the cracks. The March crack is valued -$ 3.3/bbl and April around -$ 3.7 /bbl.
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.
Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity