Asia oil/products: Crude rebounds, refining margins rise
Quantum Commodity Intelligence – Middle East crude prices rebounded strongly Friday with supply/demand fundamentals set to stay tight, but stock figures in the US underpinned a rise in gasoline cracks.
Dubai cash for September delivery was assessed $73.00/b on July 9 (1630 Singapore time), up $2.66/b from Thursday, while DME Oman settled $2.29/b higher at $73.09/b.
Cash Brent (BFOE) for September was assessed at $75.52/b, up $2.11/b on the day, while the Brent/Dubai spread narrowed further to +$1.52/b.
Prices rallied strongly on the latest US inventory data, while reports that ADNOC was offering additional cargoes into the market have been dismissed by UAE officials.
As it stands, OPEC+ production is set to remain unchanged in August, compared to July output levels, maintaining a tight market.
Meanwhile, light sweet Murban for August was trading on Abu Dhabi's IFAD exchange at $73.85/b, compared to $75.05/b last week.
The ICE Brent vs Murban spread was around $0.15/b wider at $0.67/b, while Murban futures vs Oman futures stood at $0.76/b, up around $0.10/b.
Products
Lower stocks of gasoline in the US and Asia underpinned a move north on Friday, with higher crude also helping Singapore cracks claw back Thursday's losses. Spot RON 92 was assessed at $83.40/b FOB Singapore, up $2.80/b on the day and cracks at $8.88/b, up $0.69/b. Bids for 95 RON were heard at a $2.10/b premium. Cracks remain relatively firm on economic recovery in India, which is offsetting weaker demand in southeast Asia.
Naphtha cracks also rebounded, with bids and offers showing a slightly more backwardated structure. With bids for 1H Sep at $683/mt and 2H at $677/mt, Quantum assessed the CIF Japan September delivery market at $681.50/mt, up $22/mt on the day and leaving the crack $6.5/mt stronger at $135.50/mt.
Jet cash differentials weakened, but the crack rose a slither as the loading dates for spot material pushed further out along the contango curve. The market was assessed at a $0.53/b discount to the underlying swaps, in line with one spot deal what was heard at a $0.50/b discount to late July swaps. That put the flat price at $76.96/b, up $2.18/b on the day, and the crack at $2.44/b. Cracks remain stable at the $2-2.50/b since the start of the month.
Diesel cracks also nudged higher on the day, but remain in the $5-5.50/b range so far this month versus cash Brent. Offers were heard at $0.15/b under the underlying balmo swaps, leaving flat prices up $2.27/b for 10ppm at $79.68/b FOB Singapore. No deals were heard.
Fuel oil cash differentials weakened with deals for marine fuel 0.5% and 180cst pushing premiums to underlying swaps closer to zero. High sulfur 380cst was marked at $407.25/mt, up $12.50/mt on the day, with marine fuel up $17/mt at $534.75/mt. That has blown the spread between the two grades to $127.50/mt – the highest in months as ships without scrubbers are set to pay significantly more for fuel.
