Brent rebounds from lows Tuesday, distillates drive Europe complex
London (Quantum Commodity Intelligence) - Fears of inflation sent stock markets and Brent tumbling during the day, but the crude future rebounded mid-afternoon and was posting small gains by the end of the European day.
Wednesday's US weekly oil statistics will be keenly watched, with analyst forecasting there was a draw in crude, gasoline and distillates over the week to May 7 before the cyber-attack on the Colonial pipeline.
July Brent hit an intraday low of $67.15/b, partly reflecting the resurgence of Covid-19 in Asia, but the crude future was back to $68.44/b, up 35 cts from the same time yesterday.
However, headlines about concerns of the impact on gasoline in the US from the cyber-attack was not reflected in European oil products.
Market-on-close light-end assessments were in line or lower than Brent, but Low Sulfur Gasoil futures outpaced crude, extending a recent trend.
Products
Naphtha cargo prices gained $3.50/mt (39cts/b), and its crack value was little changed versus Brent. The crack has been in an upwards trend since April 20, a day when Singapore naphtha cracks tumbled, and started to trade much lower than Europe.
The all day assessments of Eurobob E5 and E10 gasoline ARA barges crashed lower, reflecting trades during Brent's slide. But even the 4.30pm Eurobob swaps curve failed to keep up with the Brent rally at the end of the day. The cracks value for June Eurobob paper was down 38 cts/b versus second month Brent at 16.30 UK time, and there were losses further along the curve. Cracks for June 92 Ron Singapore paper was also lower at the tine of the Asian close.
Jet cargo prices were boosted by the strength in underlying European distillates to post a $5.50/mt rise. Cracks have been trending upwards since April. Flight numbers in Europe have also been rising this month, data from Eurocontrol shows, despite a lockdown in Europe.
May Low Sulfur Gasoil futures heads to expiry Wednesday with a slight nearby contango structure. But, after a bumpy April, cracks values for diesel barges have headed north in May, and extended the rise today.
Both high sulfur fuel oil and marine fuel (0.5% sulfur) oil barges posted small gains. But HSFO cracks have been softening since mid April in tandem with Singapore 380 cst, although the latter fell more Tuesday. Singapore fuel oil stocks hit a four year high last week.
