Asia oil/products: Crude at strong premiums, fuel oil cracks rally
London (Quantum Commodity Intelligence) – Middle East crude eased slightly Thursday but premiums for physical cargoes traded at fresh yearly highs, while fuel oil cracks surged on a big draw in stocks in Singapore.
Dubai cash for August delivery was assessed at $72.30/b on June 17 (1630 Singapore time), down $0.45/b from Wednesday’s Singapore close, while DME Oman futures for August settled $72.39b at the Asia close, down 0.37/b.
The closely watched Al Shaheen tender for August-loading was heard awarded at premiums in excess of $2.00/b, the highest levels versus Dubai swaps in the post-pandemic period.
A cargo loading the first week of August was heard at around Dubai swaps +$2.50/b, while a second cargo loading late-August was heard awarded at Dubai +$2.20-$2.30/b.
Distillate-rich light grades also continue to attract big premiums with ESPO heard trading above $3.50/b and Sokol at more than Dubai +$4.00/b.
Cash Brent (BFOE) for August was assessed at $74.05/b, down $0.25/b from Wednesday’s Asian close, as the Brent/Dubai spread widened to a two-week high of $1.75/b.
Naphtha cracks flatlined on the day, despite a huge stock build of light ends in Singapore. Bids and offers indicated flat prices at $641.5/mt for 2H August and $637.50/mt CIF Japan. Quantum assessed at $63.90/mt for the full laycan, leaving cracks at $95/mt.
Spot gasoline cracks also flatlined, while paper cracks increased, steepening the spot-prompt backwardation after the steep build in Singapore, Fujairah and US stocks. Flat prices were assessed at $78.95/b FOB Singapore, down $0.20/b on the day. That left cracks at $4.90/b, up $0.04/b on the day, with paper cracks rising $0.30/b down the curve. Spot cracks remain around 4% below the average so far this month.
Spot jet cracks eased on the day to $2.75/b, around 8% below the average so far this month. Distillate stocks remain heavy in Singapore on high refinery throughput. No deals were heard with the cash differential marked at $0.20 below swaps. That left a flat price of $76.80/b FOB Singapore, down $0.35/b on the day, and a crack of $2.75/b, the lowest in seven sessions
Diesel cracks were flat as crude eased. Again there was few deals to report, but bid and offers indicated diesel was not trading at a marginal discount to futures. The 10ppm spot price was marked at $79.74/b with the crack at $5.69/b, down $0.05 on the day, but $0.19/b on the average so far this month.
Spot fuel oil cracks firmed as cash differentials showed minor changes and swaps rose higher. Bids and offers were wide for both 3.5% and 0.5% marine fuel, leaving cash differentials to swaps at flat. Stocks in Singapore fell 11%, which helped provide bullish sentiment on swaps. Flat prices were assessed at $414/mt for 3.5% and $527.50/mt for 0.5%, with cracks hitting a near two-month high of -$7.10/b and $2.4/b for the latter – a near two-week high.