Asian crude steadies amid uncertain outlook, jet cracks sustain rally
London (Quantum Commodity Intelligence) – Middle East crude oil prices stabilized Friday after the heavy losses sustained earlier this week, but near-term direction remains uncertain as trader look towards the April 28 OPEC+ meeting – although at the time of writing it was uncertain if it would be a full ministerial meeting, or limited to a JMMC meeting.
Dubai cash for June delivery was assessed at $62.21/b on April 22 (16.30 Singapore time), up $0.69/b from Thursday's Singapore close, while DME Oman futures for June settled $63.22/b at the Asian close, up $65.49/b.
Cash Brent (BFOE) was assessed at $65.53/b, up $0.70/b versus Thursday's Singapore close, maintain the Brent/Dubai EFS for June at around 16-month highs above $3.53/b, highlighting the relative Dubai weakness.
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Distillate cracks surged for the third day in a row with diesel and jet cracks versus cash Brent rallying, to their highest level in weeks.
The rise set against the backdrop of an expected recovery later in the year comes despite India battling a second wave of covid infections that threatens to batter its economy and dampen demand for energy.
10pmm spot diesel cracks rose $0.23/b to the highest level on a FOB Singapore basis as the swaps curve outstripped the rise in crude.
There was little to discuss in terms of spot market activity with the promised increase in volumes to Malaysia owing to its new ULSD standard failing to materialise. Cash differentials were maintained at -$0.41/b to reflect deals earlier in the week.
But while diesel firmed, jet spiked.
No spot deals were heard, but with cash differentials remaining at $0.60/b, swaps pulled phyical assessments higher to leave the spot crack at $2/b, more than $1/b higher than Tuesday's levels.
The move has been driven by Q3 cracks, which rose to $5.03/b from $4.24/b on Tuesday.
The jet kero-diesel 10ppm spread is now at the narrowest level in weeks on a spot basis at just -$1.30/b.
Light end cracks were stable to lower on Friday with sluggish global demand for naphtha weighing on the comples.
The spot crack fell from $82.50/mt on Friday to $80.85/mt on Thursday, around 20% down in two weeks.
Petrochemical outages in Asia are weighing on the complex as gasoline cracks broadly flatlined throughout the week.
No physical deals were reported and the benchmark RON 92 gasoline crack was assessed at $6.40/b on a spot baiss and May at $6.58/b, down around $0.08-0.10 on the day.
High sulfur fuel cracks fell and the 0.5 Marine fuel rose alongside distillates.
180 cst cargoes were marked at $378/mt, up $2/mt on the day and lagging crude, with 380cst at $373.25/mt.
Marine Fuel 0.5% was marked at $482.75/mt on the basis of one physical deal of $0.75/mt above the underlying swap.
The flat price was up $6.25/mt on the day to leave the spot crack near $10.50/b versus June cash Brent, up $0.28/b on the day.