Crude Oil
Oil prices rose on Tuesday, supported by signs that producers are following through on commitments to cut supplies.
Brent rose to settle $36.17 a barrel, up 64 cents. WTI crude futures rose $1.10, or 3.3%, to settle at $34.35 a barrel.
On Monday, Russia’s energy ministry quoted Novak as saying that a rise in fuel demand should help cut a global surplus of about 7 million to 12 million bpd by June or July.
OPEC+ countries are due to meet again in early June to discuss maintaining their supply cuts to shore up prices, which are still down about 45% since the start of the year.
NYMEX crude futures have risen above the $30/b level that represents break even for many US upstream operators, which could result in some restoration of shut-in wells soon as the global coronavirus pandemic begins to subside.
Exports of Nigeria’s key crude oil grades will jump in Jul’20, Forcados (272 KB/D, +82 KB/D MoM) and Qua Iboe (215 KB/D, +120 KB/D MoM), while Bonny Light will edge lower (189 KB/D, -1 KB/D MoM), loading programmes showed.
A flurry in cargo activity out of Libya is pointing to a potential or partial return of some of its sweet crude barrels. Sources said two tankers were placed on subjects by Vitol to load a total of 1.6 MB of Sharara crude for 31 May’20.
The US President said on Tuesday the US was working on a strong response to China’s planned national security legislation for Hong Kong and it would be announced before the end of the week.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 351,654 (+4,048 DoD) yesterday, with the total number of confirmed infections at 5,678,146 (+91,840 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack hit a one-month high of $43.55 a tonne on Tuesday, supported by higher demand and lower supplies in July from the West, including Europe.
For two straight months, Asia has been bombarded with high volumes of cargoes from the West, with levels hitting a record high of 3 million tonnes in May and more than 2.2 million tonnes in June.
The June crack has jumped back to -$1.95 / bbl.
Gasoline
Asia’s gasoline crack discount to Brent widened to $1.31 a barrel versus $1.18 on Friday.
The June crack is lower at -$0.90 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10 ppm gasoil narrowed to 69 cents per barrel to Singapore quotes on Tuesday, compared with 76 cents on Friday.
Cash discounts for jet fuel were at $1.29 a barrel to Singapore quotes on Tuesday, compared with $2.08 on Friday.
Global flying capacity for the week ahead slipped 2% on the week to around 31 million seats, above its low under the 30 million seats level, but remaining well below 115 million seats this time last year, according to OAG.
The June crack for 500 ppm Gasoil has dropped back to $2.45 /bbl with the 10 ppm crack at $ 4.95 / bbl. The regrade is at -$ 0.80 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Limited trade activity kept Asia’s 0.5% VLSFO market steady on Tuesday. Cash premiums and front-month time spreads were largely unchanged on Tuesday while the front-month crack against Brent crude edged higher to a three-session high of $7.02 a barrel despite firming crude oil prices.
The June crack for 180 cst FO is lower at – $4.10 /bbl with the visco spread at $1.35 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action for today.
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.
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.