Asia crude prices track lower, marine fuel rebounds, jet kero falls
London (Quantum Commodity Intelligence) – Middle East crude fell for the second day running Friday, ahead of the spot buying program which typically starts in the second week of the month.
Dubai cash for July delivery was assessed at $65.90/b on May 7 (16.30 Singapore time), down $1.21/b from Thursday's Singapore close, while DME Oman futures for July settled $66.03/b at the Asian close, down $1.25/b on the day.
Concerns over OPEC+ overproduction versus quotas, along with the demand slowdown from India and ongoing talks between Iran and the international community have dampened market sentiment, although most lifters are expected to nominate full-term volumes for June.
This includes Indian refiners, who are reported to have requested full allocations from Saudi Aramco in June.
Cash Brent (BFOE) for July was assessed at $68.00/b, down $1.14/b versus Thursday's Singapore close. The Brent/Dubai cash spread was slightly higher at to $2.10/b for July.
Products
Naphtha cracks slipped for the second day on Friday as the east-west spread jumped amid higher freights as well as a weaker European market that threatened to open up the arb.
One cargo swap was heard, swaps fell $10/mt, and the front-month crack pared back to $95.57/mt from $97.18/mt.
Gasoline cracks, like naphtha, fell back, with the front-month crack easing to $6.50/b from $6.91/b.
One 95 RON deal was heard, indicating weaker cracks, although that was largely because of weaker crude, with the percentage for gasoline versus crude only falling marginally to 9.75% from 10.06%.
Jet kero cracks fell back sharply, retracing gains made earlier in the week. No deals were heard but swaps fell $1.42/b for June, outpacing the $1.14/b fall in crude at the same time. June cracks now stand at $3.54/b, up $0.12/b.
Diesel 10ppm cracks flatlined on the day, but remain 8% up on the week on some very bullish data from the US on Wednesday.
The market remains backwardated with concerns about Japanese and Indian demand.
No deals were heard and cash differentials were marked at -$0.10 under the underlying swaps curve.
The big mover on Friday was, again, marine fuel cracks, which rebounded from Thursday's collapse to regain almost all of the losses after the big build in Singapore stocks.
Few deals were heard and the market remains in a steep contango. Higher sulfur fuel oil cracks were flat.
