Oil prices rose on Thursday to the highest in more than a month, extending gains on growing evidence of disruptions to crude supply from Iran and Venezuela and after a fall in U.S. inventories. Brent crude oil rose 63 cents a barrel to settle at $77.77. WTI settled 74 cents higher at $70.25 a barrel, after earlier hitting a session high of $70.50.
Both contracts were at their highest in more than one month. A rally that started earlier in the day accelerated as U.S. crude rose above $70 a barrel, and more speculators entered the market. Brent has risen by almost 10 percent over the past two weeks on widespread perceptions that the global oil market is tightening and could run short in the next few months as U.S. sanctions restrict crude exports from Iran. In addition to support from geopolitical events, natural disasters could impact the market if a potential storm system currently off the coast of Africa strengthens.
The International Energy Agency (IEA) has warned of a tightening market toward the end of the year because of falling supply in countries such as Iran and Venezuela combined with strong demand, especially in Asia. Still, the market could face renewed headwinds from uncertainty about growth in emerging markets.
Asia’s naphtha crack extended gains for the third day on Thursday to reach a 1-1/2-week high of nearly $100 a tonne as term and spot demand boosted the crack value which hit a six-week low early this week. .
The September crack has improved further to -$ 0.10 /bbl
Asia’s gasoline rebounded from an almost four-week low to reach a four-session high of $8.28 a barrel due to a draw down on stock levels. Singapore’s onshore light distillates stocks fell by 739,000 barrels to an eight-week low of 13.13 million barrels in the week to Wednesday.
The September crack is higher at $ 9.80 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asian refining margins for jet fuel eased on Thursday, slipping away from a three-month high in the previous session partly due to concerns about rising inventories of the middle distillate fuel as summer demand wanes.The September jet cracks against Dubai crude slipped to $15.57 a barrel, down from $15.63 a barrel on Wednesday its highest since May 30.
Singapore onshore stocks of middle distillates, which include gasoil and jet fuel, climbed to a five-week high of 10.361 million barrels in the week to Aug. 29, up 1.553 million barrels from the previous week,.
The September crack is lower at $ 15.70 / bbl with the 10 ppm crack at $ 16.50 /bbl. The regrade is lower at – $ 0.30 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Cash premiums of 380-cst high sulphur fuel oil sagged to a near two-month low amid active trade in physical fuel oil cargoes in the Singapore trading window on Thursday.
The 380-cst fuel oil cash premium also slipped to $4.69 a tonne to Singapore quotes, down from $5.08 per tonne in the previous session and its lowest since July 12.
Meanwhile, mirroring expectations of easing supply constraints, Singapore onshore fuel oil inventories climbed to a six-week high in the week ended Aug. 29. Stocks by 2.428 million barrels to 16.661 million barrels.
The September180 cst crack is higher at -$ 3.90 / bbl with the visco spread at $ 1.10 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Cal-19 Middle Distillates continue to firm up. We shall continue with our policy of scaling up hedging at appropriate levels should they continue firming. For now, targets are $ 18.75 in Jet and $ 18.50 in 10 ppm gasoil.
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.