Asia oil/products: Crude prices surge, gasoline, jet cracks rebound
London (Quantum Commodity Intelligence) – Middle East crude markets followed the global price surge Wednesday, hitting fresh two-year highs as the market increasingly discards a quick lifting of sanctions against Iran.
Dubai cash for August delivery was assessed at $71.10/b on June 9 (1630 Singapore time), up $1.80/b from Tuesday's Singapore close, while DME Oman futures for August settled $71.38/b at the Asia close, up $1.78/b.
China putting a block on PetroChina trading crude oil import quotas with independent refineries did little to impact on Middle East prices, despite officials saying the move could lead to a 3% drop in crude oil imports.
Backwardation remains at around a two-year high with Aug/Sep at $0.95/b and Aug/Oct around $1.70/b, helping maintain steep premiums for August-loading physical grades.
Among the 'Dubai basket' grades Upper Zakum has been the lowest-priced so far this month, setting the Dubai quote, with Al Shaheen and Oman $0.20-$0.25/b above Dubai on a cash basis, or close to $2/b over Dubai swaps.
Buying interest in light sweet grades remains firm, with China's Rongsheng heard buying Murban at premiums of around $2.50/b over Dubai swaps.
Cash Brent (BFOE) for August was assessed at $72.75/b, up $1.85/b from Tuesday's Asian close, while August Brent/Dubai was steady at $1.65/b.
Products
Naphtha cracks flatlined in trade on Wednesday, remaining firm amid a big stock draw in light ends in Fujairah. Front-month cracks were pegged at $102.50/mt.
RON 92 gasoline cracks versus cash Brent hit $6.40/b for July, up $0.86/b on the day and the highest level since 20 May, while at the same time the July-August backwardation has steepened, indicating sharper demand at the front end of the curve.
The move comes amid a big stock draw in light ends in Fujairah as well as record mobility numbers in the US, where the spread between US and EU gasoline also widened.
Jet cash differentials were assessed at $0.40/b under swaps. The crack moved higher in line with firmer swaps. The flat price was assessed at $73.90/b.
Diesel cracks moved sideways in trade on Wednesday. No deals were heard and the front-month crack for 10ppm was pegged at $6.43/b FOB Singapore, down $0.03/b on the day. Flat prices were assessed at $78.73/b FOB Singapore, largely in line with the move in crude.
Fuel oil cracks continued to decline, although there were no spot deals heard. Higher sulfur spot cracks fell to their lowest in seven sessions at -$10.15/b versus cash Brent, while 0.5% was down to a five-day low of $2.79/mt on a 6.9 density basis.
Spot prices for both were around $10/mt higher on firmer crude.
Higher inflows of fuel oil were said to be behind the fall, with Fujairah stocks falling 5% on the week. Spot prices were $397.50/mt for higher sulfur and $521.25/mt for 0.5%, both FOB Singapore.