Crude Oil
Oil prices retraced on Wednesday as the DOE reported a build in US crude stocks. Brent crude oil futures settled at $67.83 a barrel, down 14 cents, while U.S. crude fell 53 cents to $59.41 a barrel.
Disruptions to Venezuelan exports helped to limit oil price losses after distinctly bearish data emanating from the DOE.
Venezueala’s main oil export port of Jose and its four crude upgraders were unable to resume operations following a widespread three-day power blackout. The outage is the second in a month.
Oil output from Russia, OPEC’s biggest non-member ally, averaged 11.3 million barrels per day so far in March, compared with 11.34 million barrels each day the previous month.
Hedge funds and other money managers have increased bets that demand for oil will be sustained, even as the market rallied last week..
Government data showed U.S. crude inventories grew more than expected last week as a Texas chemical spill hampered exports which fell by 506 kbpd.
The bearish surprise was the drop in demand coupled with a drop in refining runs which also contributed significantly to the build in crude stocks.
The material balance report seems to suggest that distillate stocks may have built rather than drawn. Both gasoline and distillate demand dropped significantly in a manner which does not augur well for Oil Bulls.
Naphtha
Asia’s naphtha crack eased to a four-session low of $60.73 a tonne.
Demand for the fuel from petrochemical makers was seemingly slow. India’s MRPL offered 35,000 tonnes of naphtha for April 24-26 loading through a tender closing on April 2. MRPL previously sold three cargoes for March loading at an average of $16 a tonne premium to Middle East quotes on FOB basis.
The April crack is lower at -$ 5.10 /bbl
Gasoline
Asia’s gasoline crack edged up to $7.53 a barrel on Wednesday, just 15 cents off Friday’s more-than five-month high.
Seasonal demand in the U.S. coupled with a string of refinery outages in the country, as well as refinery maintenance in Asia, have given the global gasoline market a push. Light distillate stocks in Fujairah increased marginally to 11.60 million barrels.
The April crack is lower at $ 6.80 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10ppm gasoil narrowed to 18 cents a barrel to Singapore quotes, compared with a discount of 23 cents a day earlier.
Middle distillate stocks in Fujairah fell by 89 KB to 2.2 million barrels.
Cash discounts for the aviation fuel widened to 31 cents a barrel to Singapore quotes, compared with a discount of 30 cents a barrel on Tuesday.
The April/May time spread widened by 2 cents to a discount of 25 cents a barrel on Wednesday.
The April crack for 500 ppm Gasoil is lower at $ 12.80 /bbl with the 10 ppm crack at 13.75 / bbl. The regrade is steady 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 at – $5.02 a barrel on Wednesday reflected a marginal change versus – $5.01 in the previous session.
Singapore cash trades were at a standstill for the first time since March 19. There were more offers seen versus bids in the cash market.
Supplies were ample as reflected in inventories in the Middle East. Fuel Oil stock levels in Fujairah had risen 253 Kb to reach over a 15-month high of 10.373 million barrels in the week to March 25, data from S&P Global Platts published via Fujairah Oil Industry Zone showed.
The April 180 cst crack has bounced back vigorously to $ 0.00 / bbl with the visco spread at $ 1.00 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to consider 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 refiner.
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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.