Asia oil/products: Crude retreats, cracks ease

18 Jun 2021

 London (Quantum Commodity Intelligence) – Middle East crude eased for the second day running Friday following the broader commodities sell off, while refined product cracks were stable to firmer.

Dubai cash for August delivery was assessed at $70.93/b on June 18 (1630 Singapore time), down $1.40/b from Thursday’s Singapore close, while DME Oman futures for August settled $70.96/b at the Asia close, down 1.43/b.

Cash Brent (BFOE) for August was assessed at $72.81/b, down $1.24/b from Thursday’s Asian close, as the Brent/Dubai spread widened to a fresh two-week high of $1.88/b.

Meanwhile, the Brent/Dubai EFS hit another two-year high $3.89/b, compared to around $3.40/b earlier in the week and $2.90/b for the July EFS at the end of May.

This helped elevate premiums for lighter grades to near 18-month highs, with ESPO trading around $3.60/b and Sokol at $4.10/b.

Products

Products lagged the big move south in crude to leave cracks marginally flat to higher on the day, but flat prices were stronger as a percentage of crude.

Gasoline cracks for spot remain sluggish with bids and offers for 92 RON pointing to an assessment of $77.90/b FOB Singapore - $0.25/b under balmo swaps in a dynamic that shows the impact of last week’s big stock build. Spot cracks as a result largely flatlined, while paper cracks rose $0.15/b, steepening the contango as longer dated crude fell sharply. One deal for 95 RON was heard at $0.10/b below swaps.

Naphtha cracks flatlined again at $96/mt as demand in the region was offset by the prospect of fresh imports from the US. The build in gasoline stocks has led to a surplus in the US and depressed cracks in Europe. Bids indicated little change in the structure and naphtha was marked at $631.50/mt CIF Japan.

Jet paper cracks and prompt lost ground on the day, but that was down to a lower crude complex rather than any change in fundamentals. Bids were heard at levels equivalent to below -$0.20/b under swaps, leaving the cash differential at that level unchanged. Spot was marked at $75.52/b FOB Singapore, down $1.27/b on the day with the crack at $2.71, down from $2.77/b.

One 10ppm diesel deal was reported on Friday at flat to the underlying swaps market. With prompt valued at $78.43/b FOB Singapore, prices were down $1.30/b on the day. Cash differentials were unchanged at flat to swaps, leaving both paper cracks and prompt down slight on the day in a falling crude market.

Cash differentials for fuel oil eased into the negative on Friday with three trades heard -two for marine fuel and one for higher sulfur 180cst. The two deals for marine fuel were at -$0.50/mt and -$1/mt under the swaps market and the 180cst traded at -$1/mt, although that was more of a function of a rising swaps curve than depressed nearby demand. Cracks for 380 cst eased from a five-week high of -$7.10/b versus Dubai to -$7.70/b, with 0.5% at $4.07/mt FOB Singapore. Flat prices were pegged at $401.50/mt and $517/mt.