Crude Oil
Oil prices fell in volatile trade on Wednesday, weighed down by equity markets. Brent crude futures settled 66 cents lower flat at $ 69.45/bbl. WTI futures settled 33 cents lower at $ 58.81
In a sign of escalating tensions between the world’s two biggest economies, China signaled it was ready to use its dominant position in rare earths to strike back in a trade war with the United States, Chinese newspapers warned on Wednesday. This stoked concerns that an ongoing stand-off could hurt demand. Brent hit a session low of $68.08 /bbl before recovering. WTI made a low of $56.88, the lowest since March 12. Both contracts were set for a monthly decline. While China has so far not explicitly said it would restrict rare earths sales to the United States, Chinese media have strongly implied this would happen.
apI Data
Oil prices also pared some losses in post-settlement trade after U.S. crude inventories fell by 5.3 million barrels in the week to May 24 to 474.4 million, data from the API showed. Weekly U.S. oil inventory data has been delayed by Monday’s Memorial Day holiday, with the government’s report due on Thursday at 11 a.m. EDT.
However, not much can be made out from the data due to the flooding situation.
Naphtha
Asia’s naphtha crack fell to a 12-week low of $14.43 a tonne on Wednesday.
Naphtha arriving next month from the West including Europe and the Mediterranean are expected to be lower than May’s volumes estimated at some 1.6 million tonnes as the market is currently awash with cargoes.
But the lower volumes would do little to turn the market around as recent demand had been slower-than-expected due to a string of reasons including scheduled cracker maintenance, an outage in Japan in late April and an extended shutdown of Hanwha Total’s 1 million tonnes per year Daesan cracker.
Cheaper alternative feedstock liquefied petroleum gas (LPG) has also affected naphtha demand.
The June crack is lower at – $6.95 /bbl;
Gasoline
Asia’s gasoline crack tumbled to below $1 a barrel, the lowest since Feb. 25, dragged down by ample light distillates supplies. Light distillate stocks in Fujairah rose by 363 Kb to 10.42 million barrels.
The June crack is lower at 4.60 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10ppm gasoil were at 3 cents a barrel to Singapore quotes, against a discount of 4 cents in the previous session.
Cash discounts for jet fuel were at 33 cents a barrel to Singapore quotes, compared with a discount of 32 cents a barrel on Tuesday.
The physical jet fuel market in Singapore remained quiet with no offers or deals on Wednesday.
Middle Distillate Stocks in Fujairah rose by 159 KB to 2.48 million barrels.
The June crack for 500 ppm Gasoil is lower at $ 13.40 /bbl with the 10 ppm crack at 14.10 / bbl. The regrade is at -$ 0.30 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month viscosity spread, the price differential between front-month 180-cst and 380-cst high-sulphur fuel oil (HSFO) swaps, slipped on Wednesday, edging away from a four-year high in the previous session.
Sluggish demand for high-viscosity bunker fuels and generally tighter supplies of low-viscosity blendstocks have helped boost the price differential between 180-cst and 380-cst fuel oil.
The viscosity spread for June slipped to $13 a tonne on Wednesday, down from $13.25 a tonne in the previous session, its highest since May 2015.
Fuel Oil Stocks in Fujairah dropped by 58 KB to 11.49 million barrels.
The June180 cst crack is lower at – $ 2.75 / bbl with the visco spread at $ 2.10 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to report
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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.