Asia oil/products: Crude prices edge higher, gasoline cracks march higher

24 Jun 2021

London (Quantum Commodity Intelligence) – Middle East crude prices moved up Thursday to new 26-month highs, while refined products cracks were mixed, with distillates down, light ends up and fuel flatlining.

Dubai cash for August delivery was assessed at $73.70/b on June 24 (1630 Singapore time), up $0.30/b from Wednesday’s Singapore close, but DME Oman futures for August settled $73.58/b at the Asia close, down $0.01/b.

Cash Brent (BFOE) for August was assessed at $75.55/b, up $0.83/b from Wednesday’s Asian close, while the Brent/Dubai spread narrowed to $2.01/b.

The Middle East spot market has largely wound down ahead of month-end, with August procurement completed and focus now switches to next week’s OPEC+ meeting.

The producer group is coming under strong pressure to hike output by at least 500,000 bpd, but weak distillate cracks are of concern to Middle East producers who may resist Russian proposals for higher production quotas.

Meanwhile, Dubai's Department of Petroleum Affairs left its September OSP unchanged at DME Oman minus $0.20/b.

Products

Naphtha cracks firmed as swaps rose down the curve on good petrochemical demand. Spot cracks hit a near two-week high of $106.28/mt CIF Japan, up $2/mt on the day. One deal was heard at $665/mt CIF Japan for second half August, indicating firmer cash premiums over swaps. Flat price was assessed at $662.75/mt.

RON 92 gasoline cracks hit a one-month high in trade on Wednesday of $6.39/b FOB Singapore, buoyed by a draw in stocks in the US overnight and a moderate draw in Singapore stocks this week. US and European cracks were up $0.40-0.70/b on the day, adding to the bullish momentum, widening the east-west spread and opening up the arb from Europe. Gasoline 92 RON was marked at $82.10/b FOB Singapore. One RON 95 deal was heard at $83.70/b.

Distillate cracks eased on Thursday with jet cracks hitting a two-month low and 10ppm cracks hitting a two-day low and near a six-week low. No physical deals were heard, but swaps lagged the move in crude higher as stocks in Singapore rose to a five-week high.

Q4 jet cracks are at a two-month low, however, faring better. Cash differentials widened and are now pegged at -$0.40/mt, leaving a flat price of $78.02/b and a cracks of $2.31/b.

10ppm diesel cracks were $5/b, down $0.05/b on the day on a flat price of $80.71/b and a cash differential of -$0.10/b.

Fuel oil cracks flatlined on Thursday, shrugging off Singapore figures that showed stocks have fallen to a four-week low. No deals were heard and cash differentials were pegged at a small discount to the swaps. Marine fuel 0.5% crack was marked at $1.65/b, down just a cent on the day based on a flat price of $534/mt FOB Singapore. Higher sulfur cracks were marked at -$10.12/b, down $0.08/b on the day on a flat price of $416.50/mt FOB Singapore.