Asian oil resumes upwards trend, Asian refining margins, naphtha cracks collapse

London (Quantum Commodity Intelligence) –Middle East crude oil prices resumed the bullish momentum Tuesday, hitting fresh 5-week highs as the Libyan force majeure lifted global crude markets although rising coronavirus cases in Asia remain a concern.

Dubai cash for June delivery was assessed at $65.70/b on April 20 (16.30 Singapore time), up $0.90/b from Monday's Singapore close, while DME Oman futures for June settled $65.92/b at the Asian close, up $0.95/b.

The force majeure at the port of Hariga had more impact on Brent though, given Libyan barrels typically supply Europe and are closer in quality to the North Sea.

Cash Brent (BFOE) was assessed up $0.90/b at $68.01/b versus Monday's Singapore close, lifting the cash Brent/Dubai spread to two-month high of $2.31/b.

Meanwhile, the June Brent/Dubai EFS was assessed at $3.39/b, the highest level since November 2019.

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The rise in the world's benchmark light, sweet crude futures contract hit naphtha margins hard Tuesday, with one deal for 1H July heard at $582.50/mt CIF Japan, just $1.50/mt higher than Monday despite the $1.20/b rally in crude.

Slowdown in cracker demand said to be the reason, with Formosa said to have experienced an unplanned shutdown.

The contango in the gasoline crack curve continued Tuesday with spot cracks versus June cash Brent stabilising while further down the curve cracks firmed.

Three deals were heard depressing spot value with Ron 92 changing hands in a range of $74.70-74.88/b.

No deals were heard in the jet kero market, leaving the premium to the underlying swaps unchanged at -$0.60/b.

But with the swaps market sluggish, spot cracks fell to their lowest in more than a week.

The spot crack FOB Singapore was marked at $0.84/b, down $0.70/b on the day, with May down $0.56/b to the $2.09/b.

Like, jet diesel cracks weakened in the front end, steepening the crack curve.

With two deals heard at around a 20-25 c/b discount to the underlying swaps, the crack for spot tonnes fell to $3.31/b, down $0.49/b on the day.

In comparison, the May crack fell $0.44/b.

High sulfur fuel oil prices FOB Singarpore rose around $5/mt in both the spot market and the nearby swaps - a move that lagged the rise in Brent, but was closely aligned to the much lower hike in heavier Dubai barrels.

Three deals were heard at a $0.75/b premium to the underlying swaps.