Asia oil/products: Crude rebounds strongly, jet, fuel oil cracks lag
London (Quantum Commodity Intelligence) – Crude oil in Asia moved sharply higher Monday, breaking a four-day losing streak as investment bank Goldman Sachs maintained its bullish outlook for the demand recovery, while doubts have been cast over an immediate deal with Iran when talks resume in Vienna this week.
Dubai cash for July delivery was assessed at $66.23/b on May 24 (1630 Singapore time), up $3.03/b from Friday's Singapore close, while DME Oman futures for July settled $66.43/b at the Asia close, up $3.18/b/
Cash Brent (BFOE) for July was assessed at $67.63/b, up $2.81/b from the Friday's Asian close, as the Brent/Dubai cash spread narrowed to a near three-month low of $1.40/b
Physical premiums were holding firm with spot Oman heard at around Dubai swaps +$1.45/b, while Murban was pushing towards Dubai swaps +$2.00/b.
Products
Naphtha and gasoline cracks moved higher on Monday, in line with firmer crude.
Several gasoline deals were heard in the market with 92 RON trading twice and 95 RON once, the former equivalent to a price of $74.10/b and the latter at $75.70/b. While the cracks were firmer, they were underpinned by a rise in crude with the ratio largely unchanged on the day.
A similar picture was seen for naphtha, with swaps moving higher, but only to the same percentage as Brent, leaving the crack higher, but the ratio to Brent the same. No trades were heard.
Jet fuel cracks continued to slip for the second day in a row as passenger growth stalled. Two deals were heard – one at balance May swaps -$0.20/b and one at June at -$0.30/b.
Gasoil 10ppm cracks rose marginally, but the ratio to crude slipped back. One deal was heard at June swaps plus $0.25/b.
Asian fuel oil cash differentials fell with marine fuel oil 0.5% valued at $3/mt below the underlying futures as higher sulfur material pulled the crack south.
Sluggish demand for fuels in general at the hub of Singapore meant spot prices were valued at $476/mt, up $15.75/mt on the week, but the crack was at $1.36/b, down $0.52/b on the day. 3.5% was valued at -$10.66/b, $0.70/b down on the day.