Asia oil/products: Crude higher but road fuel cracks gain

Quantum Commodity Intelligence - Middle East crude resumed the upwards trend Thursday, registering fresh three-month highs that were not enough to stop gasoline and diesel cracks from rising.

Dubai cash for August delivery was assessed at $118.78/b on 9 June (1630 Singapore time), up $2.27/b from the previous Singapore close, while DME Oman futures for August closed at $118.80/b, up $2.39/b.

Spot premiums held firm with flagship medium sour grades pegged at above Dubai swaps, at +$7/b for Upper Zakum and Oman, while Al Sheenen was talked at around +$7.25/b.

On the light sweets, Murban continued to power higher, with sellers now looking for premiums of $10.50/b to the Aug22 Dubai swap.

ICE Brent futures for Aug22 were valued at $123.06/b on the Singapore 1630 close, up $2.26/b from the previous Asian close. The August Brent/Dubai cash spread was steady at $4.28/b, while the August Brent/Dubai EFS widened to around $11.35/b on the Singapore close.

Products

Naphtha saw Shell again offering down at the front of the cash delivery window, a seller at $839/mt CFR Japan for 2H July with no buying interest heard. Paper was more bullish and helped to stem further losses on the flat price, gaining $13.25/mt to $843.75/mt, but cracks continue to slip – down another $2.37/mt to a fresh low of -$53.30/mt.

Gasoline saw a big jump in the paper market, with spreads between grades compacted in the physical as 92 RON traded at the back of the delivery window at $152.30/b and 95 RON at the front at $157.50/b. Having been on a downwards trajectory this week, the 92 RON crack to spot Brent is back where it started the week, gaining $4.20/b on Thursday to hit +$30.53/b. That came as weekly data from Singapore showed a 1% drop in stocks, with the 140,000-barrel decrease taking stocks to a three-week low of 15.1 million barrels.

It was another quiet day for jet cash markets, but the paper trade saw more definition in a busy session that helped lift the flat price $1.84/b and pull back some recent losses. That was not enough to offset the rise in crude, however, with the spot crack to Brent dipping another $0.29/b to +$41.94/b.

Diesel cracks ate into Wednesday's losses and started to move higher again amid a draw in regional stocks. 10ppm traded at the front end of the cash market between Shell and Vitol at a $3.90/b FOB Singapore premium to swaps for pricing around 19 June. Subsequent bids for the front and middle of the cash window helped to lift the cash curve further. Up $2.48/b from Wednesday on the outright at $175.17/b, the spot crack to Brent was back on its upwards march as it gained another $0.35/b to +$52.79/b. Stock data from Singapore showed distillates down 3% last week to a five-week low of 6.8 million barrels.

Marine fuel 0.5% sulfur saw plenty of interest on either side of the cash market but with a wide spread that left the cash differential steady from Wednesday at $63.25/mt FOB Singapore. That translated into a flat price up $14.75/mt at a fresh high of $1,057/mt, with the crack to Brent up a penny to +$30.81/b. Weekly Singapore stocks data showed a 4% increase in residual fuel, with the 840,000-barrel rise taking total stocks to 21.4 million barrels.

The high sulfur fuel oil window for 380 CST saw PetroChina bidding alone and only Gunvor offering, with a narrow bid-ask spread seen but nothing trading. For 180 CST, Philips 66 bid alone well below where prevailing value was assessed against offers from Total. With cash differentials unchanged, the 180 CST price was marked $7.75/mt higher at $625.25/mt and 380 CST was up $0.25/mt to $579.25/mt.