Middle East crude choppy ahead of OPEC+ meeting
Dubai, UAE (Quantum Commodity Intelligence) - Middle East crude oil moved lower Thursday, as growing concerns over the pace of the demand recovery and potential output hikes by OPEC+ producers extended the week's softer sentiment.
The upcoming Easter Holiday weekend meant that Singapore markets closed 1230pm local time with QED assessing Dubai cash for June delivery at $61.45 per barrel on March 31, down $1.35/b from Wednesday's June contract close.
Prices later recovered from the lows and DME Oman futures for June settled $0.50/b lower at $62.44/b. DME price was at the regular 1630 Singapore time, or four hours later than the Dubai Singapore close.
All eyes switched to the OPEC+ virtual meeting after Asian markets closed, with expectations moving towards a staggered production increase, possibly starting from May.
On Wednesday U.S. Energy Secretary Jennifer Granholm called her Saudi counterpart Prince Abdulaziz bin Salman to highlight the importance of 'affordable energy'.
Products
A largely expected draw on US gasoline stocks of 1.7m barrels had a negative impact on the front month crack, with May RON 92 swaps versus cash Brent marked at $6.57/b, down $0.56/b on the day.
The May swap was marked at $69.50/b, down $2.10/b on the day.
Two flat price deals were heard – 92 RON at $69.90/b for late April loading (equivalent to a $0.40 premium over underlying swaps) and a 97 RON for April 20-24 loading at $74.30/b - a move that widened the spreads between the octanes.
Naphtha May swaps fell $11.5/mt on the day, pressuring cracks to -$0.40/b, down around $0.30/b on the day. One physical deal was heard for first half June delivery at $565/mt CFR Japan.
With backwardation at $0.40/mt a day, that was normalised back to the 45 day window of $562.25/mt.
Further down the barrel, distillate cracks weakened overnight owing to a bigger than expected draw in the US.
Diesel 10ppm front month cracks (May) fell to $2.97/b, down around $0.30/b on the day, as reports of a 2.5 million barrel-build injected bearishness into the market.
The May 10 ppm swap was pegged at $65.90/b, down $2/b on the day. On the physical side, cargoes were marked at a $0.35/b discount to the underlying swaps.
Jet Kero May swaps dipped $2/b in trade and pulling cracks lower with the front month crack versus cash Brent falling $0.11/b on the day to $0.57.
No physical deals were heard and the $0.60/b discount versus underlying swaps was still seen as value.
Fuel oil cracks were mixed.
High sulfur 180cst and 380cst May cracks versus Cash Brent were static to firmer at $5.45/b and -$6.63/b, respectively, with 0.5% Marine Fuel around $0.40/b softer at $9.53/b.
No physical deals were heard and the cash premiums over the underlying swaps held firm at $1.50/mt for 180cst, flat for 380cst and $0.50/mt for the 0.5% sulfur.