Asia oil prices up, US pipeline outage hikes distillate, gasoline cracks
London (Quantum Commodity Intelligence) – Middle East crude oil prices moved higher Monday, following the broadly firmer trend after the weekend cyberattack on a key US products pipeline.
While the Colonial-operated pipeline outage does not directly impact Middle East crude, market watchers noted that any sustained shutdown was likely to lift global product cracks and in turn boost demand for crude.
Dubai cash for July delivery was assessed at $66.70/b on May 10 (16.30 Singapore time), up $0.80/b from Friday's Singapore close, while DME Oman futures for July settled $66.85/b at the Asian close, up $0.82/b on the day.
Cash Brent (BFOE) for July was assessed at $68.83/b, up $0.83/b versus Friday's Singapore close. The Brent/Dubai cash spread was slightly higher at $2.13/b for July.
Products
As expected, the pipeline attack drove nearby cracks for all products, bar fuel oil, higher.
The big movers were middle distillates, which saw day-on-day rises of about $0.35/b on the June crack versus August cash Brent and rises as a ratio of crude.
No spot deals for either diesel or jet kero were heard, but the outage was expected to drive global prices higher and distillate swap values outpaced crude higher.
Diesel 10ppm swaps rose $1.29/b to $74.19/b for June, with the crack up $0.35 to $5.64/b. However, with refineries due to come online over the coming months, spot prices may come under pressure.
Jet kero June swaps rose $1.30/b to $72.45/b with the crack marching higher to $3.90/b, the highest front month and June value for months. The cash differential was seen unchanged at $0.18/b.
Gasoline swaps did not trail far behind, despite three-year highs being chalked up on US futures. 92 RON swaps for June rose $1.13/b to $74.14/b and pushed the crack higher to $6.78/b to reverse some of last week's losses.
Three physical deals were heard with 92 RON trading at $75.50/b and 95 RON at a $1.50/b premium.
Spot Naphtha cracks eased, although June rose to be pegged at $97.91/mt versus August cash Brent. One deal was heard for July 1H at $606.50/mt, with the 2H at $602.5/mt.
Fuel oil cracks eased around $0.50/b across all three grades of 180cst, 380cst and marine fuel.