Asia oil/products: Crude edges higher, jet cracks creep higher
Quantum Commodity Intelligence – Middle East crude prices continued to firm Tuesday on strong IEA data and the OPEC+ impasse, while refined products were broadly stable on the day.
Dubai cash for September delivery was assessed $74.35/b on July 13 (1630 Singapore time), up $0.85/b from Monday, while DME Oman settled $0.89/b higher at $74.50/b.
The lack of progress on finding a solution on the ongoing OPEC+ production row raised further concerns that a deal would not be brokered in time for the proposed 400,000 bpd increase in August.
This comes on top of the IEA reporting a 3.2 million bpd demand increase in June compared to May, and warning oil markets will "tighten significantly" unless OPEC+ can find a compromise.
Cash Brent (BFOE) for September was assessed at $75.76/b, up $0.80/b on the day, while the Brent/Dubai spread narrowed $0.05/b +$1.41/b.
Products
Product cracks were broadly steady on Tuesday as crude rose.
No Naphtha deals were heard and bids and offers did little to disprove the existing market structure. The flat price was assessed at $693/mt CIF Japan for mostly September and a little bit of October loading. Cracks are at $136/mt.
Several deals were heard for gasoline that pointed to lower cracks and a lower premium for 95 RON. Cracks along the full curve slipped, and with front and second month backwardation in the swaps market also narrowing, there are indications of front end weakness. 92 RON traded at $84.40/b FOB Singapore, although there remained offers at that level, while 95 RON traded at $86.00/b for prompter loading dates. Cracks are at a three-day low, although they remain significantly above June's average.
In jet fuel, cash discounts widened on aggressive offers, although cracks rose for the fifth straight day for the first time in two months and are now higher than the average for June. More seats were added last week, but fresh travel curbs in southeast Asia are keeping a lid on further gains. Flat prices were marked at $78.61/b FOB Singapore, up $0.91/b on the day with the crack at $2.85/b, up $0.11/b on the day.
10ppm diesel cash differentials narrowed closer to parity to swaps on one deal heard. 10ppm was assessed at $81.35/b FOB Singapore and the crack crept higher. The spot regrade was unchanged at -$2.75/b.
Higher sulfur fuel oil cracks were broadly stable, although lower sulfur marine fuel cracks neared a five-week high amid data from Singapore that bunker sales rose marginally in June. Marine fuel was assessed at a $2/mt cash differential to the swaps over a bid of $1.50/mt ($544.75/mt). 380cst 3.5% sulfur was assessed at $413.25/mt FOB Singapore a spread of $131.50/mt.
