Crude Oil
Oil prices rose nearly 2 percent on Tuesday as attention centered on geopolitical factors tightening supplies that are leading to falling exports from Venezuela. Brent crude oil futures settled at $67.97 a barrel, up 76 cents, while U.S. crude rose $1.12 to $59.94 a barrel.
Venezuela’s main oil export port of Jose and its four crude upgraders have been unable to resume operations following a massive power blackout on Monday, the second in a month, according to industry workers and a union leader close to the facilities.
China’s economy showed “unmistakable” signs of recovery in the first quarter, with company profits, investment and hiring improving, but policymakers may be relying too much on extraordinary levels of credit, China Beige Book showed on Wednesday.
The American Petroleum Institute reported a rise of 1.9 million barrels in US crude stocks. While this was contrary to expectation, the healthy draws in both Gasoline as well as distillate stocks have to be supportive for crude prices.
Naphtha
Asia’s naphtha crack rose to a near three-month high of $64.93 a tonne on Tuesday on expectations of lower supplies arriving next month from the West, including Europe.
Although there are some 2.1 to 2.2 million tonnes of naphtha arriving in Asia this month from the West including Europe, making this a five-year high, cargoes arriving in April could be lower.
The April crack is higher at -$ 4.65 /bbl
Gasoline
Gasoline crack was at a three-session low of $7.44 a barrel but fundamentals have improved significantly compared to between November 2018 and February 2019, supported by demand across regions of Asia to Europe and the United States. Northwest European gasoline refining margins for instance was at a six-month high of $7.60 a barrel on Monday following a switch to summer-grade specification and as exports to the U.S. East Coast rose.
The April crack is higher at $ 7.30 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10ppm gasoil were at a discount of 23 cents a barrel to Singapore quotes, compared with a discount of 22 cents a day earlier.
The gasoil market in Asia is weak as there are barrels available in the region, while the ongoing spring refinery turnarounds have not been able to offer sustainable strength so far.
The front-month timespread for 10ppm gasoil , which flipped into a contango from backwardated structure a couple of weeks ago, widened by a cent on Tuesday to be at a discount of 27 cents per barrel.
Cash discounts for jet fuel were at 30 cents a barrel to Singapore quotes on Tuesday, as against a discount of 33 cents per barrel on Monday.
The April crack for 500 ppm Gasoil is lower at $ 12.85 /bbl with the 10 ppm crack at 13.80 / bbl. The regrade is higher at +$ 0.50 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The front-month 380-cst fuel oil barge crack rose on Tuesday but levels were still near a nine-week low due to plentiful supplies.
Asia’s 380-cst discount to Brent crude was at $5.01 a barrel on Tuesday, up from a discount of $5.35 on Monday when the level was at its lowest since Jan. 21.
Exxon Mobil Corp expects high-sulphur fuel oil demand to fall 25 percent by 2025, as a new set of emission regulations kick in next year.
The April 180 cst crack is higher at – $ 0.40 / bbl with the visco spread at $ 1.10 cents/bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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.