Asia oil/products: Crude tumbles another 3.6%, gasoline crack slides
Quantum Commodity Intelligence – Middle East crude prices tumbled sharply for the second successive day, while gasoline cracks fell for the third straight day.
Dubai cash for September delivery was assessed $70.59/b on July 8 (1630 Singapore time), down $2.66/b from Wednesday, a fall 3.6% on the day and a 7% fall in two days.
Cash Brent (BFOE) for September was assessed at $72.41/b, down $2.62/b on the day. Likewise, cash Brent has also tumbled by around 7% in the last two sessions.
The front-line September EFS was trading around $4.30/b, consolidating the two-year highs seen over the week and up around $0.40/b from late-June levels – largely a function of the steep Dubai backwardation.
This would suggest the market is factoring in a continued tight supply/demand scenario, rather than a flood of oil coming into the market.
Saudi Arabia and UAE remain deadlocked on the deal to add 400,000 bpd in August and a total of 2 million barrels by year end.
Products
For refined products, gasoline cracks retreated for the second successive day amid a 12% week-on-week rise in Singapore stocks. Cargoes of 92 RON traded three times between $80.50-80.60/b, with 95 RON changing hands at $82.90/b FOB Singapore for later loading dates to narrow the spread to around $2.50/b. Cracks were marked at $8.19/b, down $0.68/b on the day and slightly lower than the $8.54/b average so far this month.
Naphtha cracks, however, broadly flatlined in the nearby due to gasoline backwardation, but cracks fell down the curve by around $2/mt. No deals were heard and CIF Japan was assessed at $659.50/mt CIF Japan.
Jet cracks flatlined on the day. Bids and offers were heard, although they remain far apart. The cash differential was assessed at -$0.40/b, where the last trade was executed just two days ago and despite a $16% fall in Singapore stocks. Regional demand is behind global figures and with refining runs said to be higher, jet cracks struggled. The flat price was assessed at $74.78/b FOB Singapore, down $2.61/b on the day in line with crude and the crack was marked at $2.37/b, up $0.01/b.
Diesel 10ppm differentials widened to -$0.10/b amid lower offers, although no deals were reported. Demand is said to be subdued ahead of the monsoon season in South Asia. Middle distillate stocks are at a four-week low and around 16% below the average so far this year. The crack was hovering above $5/b versus the average so far this month of $5.16/b. Flat price was assessed at $77.41/b FOB Singapore.
Fuel oil cracks improved around $0.40-0.50/b alongside lower crude. Singapore stocks are down 5% and nearing a four month low, but inventories are broadly the average so far this year. Two deals were heard at a $1.25/mt premiums to the underlying swaps for marine fuel 0.5%. With swaps firmer than crude that pegged the flat price at $517.75/mt FOB Singapore and the crack at $2.63/b – which was broadly the average so far.
