April intraday bid/offer and liquidity levels for main market movers

24.04.2023 By Stanislav Ermilov

Click here to subscribe to our mailing list and receive our market updates directly in your inbox.

Crude oil surged at the start of the month on the back of the surprise OPEC+ decision to cut production by 1.66 million bbls per day. Brent reacted to this news by climbing up towards $90/bbl, only to slip back towards $80/bbl in recent days. A look at OTC markets gives us some clues for the mid-month shift in crude sentiment. Gasoline, particularly in the East, has made a significant correction lower, with traders potentially eyeing the continued weakness in distillates and tempering bullish sentiment before the summer driving season. Crude traders now have a close eye on refining margins globally to evaluate just how much the weakness in clean products will dampen refiners’ enthusiasm to purchase crude when they come out of maintenance. With OPEC having taken such drastic action to bolster crude, bulls cannot now afford clean products to waiver over the coming months.

Gasoline and Naptha

A closer look at OTC gasoline cracks shows that the weakness in the gasoline complex likely emanated from selling in the Singapore pricing centre. 92R cracks endured a torrid start to the month with cracks gapping $3/bbl lower over the first three sessions of the month.

Despite a momentary recovery, by mid-month wholesale gasoline selling across all three major price centres ensued and we are yet to find a floor. Naphtha meanwhile has been rangebound between -$8.50 and $6.50/bbl, but well off the start of year highs.

Distillates

Similar to gasoline, distillates have been weakest in the East. Singapore timespreads are now flirting with contango, while East/West has been trending lower. This weakness has translated into selling in Europe where ARA 10ppm Barge diffs were marching down from +$7.00/mt at the start of the month towards zero before OTC offers thinned out. This seems to be a floor for now as stock levels are too low for the market to get comfortable with contango in distillate markets.

Fuel Oil

Conversely to the clean complex, fuel oil has had a stellar April. This is one to watch and is offsetting the impact of clean product weakness on refinery margins somewhat, but likely not by enough to have any meaningful impact on the demand for light sweet crudes.

Click here to subscribe to our mailing list and receive our market updates directly in your inbox.

BACK TO NEWS

Related
News

Middle Distillates’ downward move should not be overlooked amidst a jumpy flat-price environment

All eyes will be on Gasoline performance as we enter Q2. While Crude has been more sensitive to Distillates’ waxing and waning in recent years, this year Gasoline seems to be the fraction of the barrel with the most riding on it. Question marks remain over global oil demand growth this year so US Gasoline demand this summer will be a metric high up on traders’ lists of items to track.

All eyes on gasoline as traders look to pin their hopes on Light Ends to defy the demand bears

Red Sea-fuelled Distillates buying spree winds down amidst emergent strength in Crude spreads

As oil markets settle into the new normal of reduced transit through the Red Sea, price action has become less erratic. TC5 has not made new highs, European Jet Fuel (a market hugely dependent on Asian re-supply) has come down dramatically and Gasoil cracks have been on the decline. Crude spreads have rallied significantly, but […]

Imbalance not shortage: Red Sea tensions create re-supply uncertainty in arb dependent product markets

Bar Friday night’s spike, crude has enjoyed an uncharacteristically sedate ascent since the turn of the year. Brent is heading into the mid $80s, and WTI firmly in the high $70s. Despite the barrage of geopolitical risk headlines in the market, flat price has not been a runaway train. While product diffs have been hyper-sensitive […]

Geopolitical risks play second fiddle to an oil market trying to re-price back to fundamentals

Overview Last month we noted the post-summer implosion of US gasoline markets and the risks it posed for the oil complex. This eventually manifested in a spectacular decline in WTI, as refiners shunning crude in the mid-continent translated to faster-than-forecast US crude builds. Brent was not spared – as may have been the case in […]

Clean product markets stutter as geopolitical price boost veils true oil market fundamentals

In moments like this, OTC markets provide a clearer view of oil fundamentals than flat price, which often gets muddled by the noise of speculative fast money. Crude oil started the month on a softer tone, with Brent flat price steadily drifting down into the mid-to-low $80s, from the heady heights of the mid $90s […]

Crude rallies $10/bbl as the rapid grab for physical barrels forces WTI and Brent shorts to fall on their swords

We wrote last month about clean products being far too strong for crude to sit idly by. This did not take too long to correct, with Oct WTI rallying from $80/bbl up to intraday highs over $93/bbl in just three weeks, dragging Brent up with it into the mid 90s. Crude spreads have also done their bit to dampen the clean product cracks down from extreme levels.

Clean product cracks pushing margins back to year-high levels, leaving refiners poised to bid up crude oil

The first half of August saw strength across the entire oil complex. Brent made a push up
towards $90/bbl before easing in tandem with the recent weakness across global equities
(October Brent futures currently trading $83.98/bbl).

Bullish price action in July across the barrel with flat price and product cracks marching upwards

We wrote last month about the disconnect between crude flat price and the stellar performance in clean product cracks. This month crude responded to the strength and the ongoing chatter of accelerated Chinese crude stockpiling, with Brent rallying $10/bbl up to $84/bbl. While crude rallied, gasoline and diesel markets soared higher to make new year […]

Crude in tug of war with gasoline and distillates: June bid/offer and liquidity levels for main market movers

Flat price crude faced significant pressure in June with WTI and Brent struggling to stay above $70/bbl and $75/bbl respectively. The underwhelming performance in flat price is in line with a bearish macro picture and a weak crude physical market, reflected in continually suppressed DFLs and talk of plentiful physical offers in the Singapore MOC. […]

May intraday bid/offer and liquidity levels for main market movers

Stay ahead of the market with Tallarium’s insights and discover the dynamics of the oil market.

How gasoline traders can leverage automation to gain a competitive advantage

Gasoline markets are some of the most unpredictable and complex in the commodity space. This creates both challenges and opportunities for gasoline traders.

McKinsey believes digitisation can provide a competitive edge in metals, but we think the impact will be even bigger for OTC energy

McKinsey believes digitisation can provide a competitive edge in metals, but we think the impact will be even bigger for OTC energy.

What is one of the biggest challenges OTC energy traders encounter every day?

Across the more than 200 traders we engaged with, we saw one consistent challenge emerging time and time again. Read on to find out what.