Crude Oil
Oil prices rose on Monday, with U.S. crude futures jumping more than 2 percent, as markets continued to focus on supply disruptions and a possible hit to crude output from U.S. sanctions on Iran. October Brent crude futures, the most actively traded contract, settled at $75.55 a barrel, up 79 cents. The September Brent contract, which expires on Tuesday, settled at $74.97, up 68 cents. U.S. West Texas Intermediate crude futures (WTI) rose $1.44 to settle at $70.13 a barrel..
WTI rose on expectations that U.S. inventories fell last week and worries that an outage at a Syncrude facility in Canada will not be solved as soon as expected. Crude inventories at the Oklahoma delivery point for WTI have been dwindling, in part due to the situation at the Syncrude facility that has reduced the flow of oil into the hub. Stocks at the Cushing hub dropped to 23.7 million barrels, the lowest since November 2014 in the week to July 20.
Oil prices have rebounded from recent lows over the last two weeks, as looming sanctions on Iran have already started to curtail exports from that country.
OPEC hiked production 70,000 barrels per day to 32.64 million bpd, a 2018 high. Further supply increases could offset production outages and pressure prices. Prices remain buoyed by a tight supply outlook, with global inventories down from record highs in 2017 and U.S. inventories at three-year lows.
Naphtha
Asia’s naphtha physical crack eased from a seven-month high on Monday but still hovered above $122 a tonne as recent strong demand and tighter supplies drove up the value and spot premiums of open-specification grade last week. Spot demand however was mostly muted at the start of this week as buyers have mostly completed their purchases for cargoes scheduled for first-half September delivery.
The August crack has eased to $ 0.60 /bbl.
Gasoline
Asia’s gasoline crack has also edged down marginally to $8.09 a barrel from $8.15 on Friday.
The August crack has dropped to $ 9.30 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s jet fuel cash premium to Singapore prices hit a 2-1/2 week high of 11 cents on Monday while 10ppm gasoil remained at a small premium after it turned positive on Friday for the first time since June 22 as supplies tightened.
The August crack has fallen to $ 14.05 / bbl with the 10 ppm crack at $ 14.95 /bbl. The regrade is higher at $ 1.00 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Singapore 380-cst ex-wharf premiums traded lower last week despite shortages of finished grade bunker fuels for prompt delivery as higher outright prices and concerns of contaminated fuels prompted buyers to seek minimal quantities of the fuel.
Ex-wharf premiums for the 380-cst fuel were at about $5-$6 per tonne to Singapore quotes on Monday, down from about $10-$12 a tonne in the previous week.
Meanwhile, 380-cst cash premiums edged slightly lower on Monday, but held near their recently elevated levels amid strong buying interest for physical cargoes of the fuel in the Singapore window.
The August 180 cst crack has eased to -$ 0.60 / bbl with the visco spread at $ 1.05 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to report on the same today.
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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.