rongsheng international trading pricelist

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The European region is primarily the most impacted region by the Russia-Ukraine conflict in the eastern region. In response, the U.S., and the E.U., with the support of several other nations, imposed hefty sanctions on Russian Energy supplies. In retaliation, Russia announced only trading in Rubel to strengthen the domestic currency value and offered a significant discount to the nations in the Asia Pacific market interested in importing the Russian Urals. In the second half of the quarter, E.U finally decided to put an embargo on Russian Crude Oil except for the countries with refineries that directly source Crude Oil through inland pipelines. As a ripple effect, the prices for Crude Oil in Europe staggered at historical highs and averaged at USD 112.45 per barrel in June 2022.

The price trend of crude oil showcased a major escalation in quarter 1 of 2022 after the values shot up from USD88.15 to USD107 per barrel from January and March. India began to see an increase in its oil import bill due to the surge in international oil prices, which surpassed USD100 in H2 of Q1 for the first time in nearly eight years since 2014, as it imports more than 80% of its crude oil from the international market. The crude and gas markets intensified as tensions between the two countries rose following Russian President Vladimir Putin"s decision to launch "military actions" along the Ukraine border. However, India was unconcerned about the supply disruption due to political turmoil, as Russia accounted for only 1% of the country"s total imports in 2021.

The record high prices of oil and Natural gas severely hit the European energy market in the 1st quarter of 2022 after the Russia’s aggressive military attack on Ukraine. In Q1, Russian profits from oil and gas sales rose, but imports plummeted as companies fled the country in defiance of Vladimir Putin"s invasion of Ukraine, resulting in a significant surplus in Russian goods and services trade. Despite tremendous international condemnation of Russia"s invasion of Ukraine, the country continued to sell oil to its primary export markets in the first quarter. China and India, as well as other Asian importers, continued to buy Russian oil at steep discounts, while Europe continued to buy natural gas. For the most part, Europe continued to acquire Russian oil, despite the fact that many European giants said in early March that they would no longer trade with spot Russian crude and oil products following the invasion of Ukraine. The values for Brent Crude Oil in Germany were evaluated at USD118.30 per barrel in the month ending March.

The crude oil market remained resolutely high in the APAC region, amidst major consumers seeking more barrels with the demand turning robust as various downstream industries restarted again after a turnaround. Refiners maintained their key focus on the Chinese and Indian spot demand as operations ramp up turning fuel demand high. Indian Oil Corp. (IOCL) issued a tender in mid-March seeking sweet crude from West Africa and other regions while China"s Rongsheng closed a buy tender for purchase of nearly 3 million barrels of crude from Oman, Murban crude and Upper Zakum in mid-March. Crude futures rose as OPEC+ supplies remained tight with demand expected to increase as global economic activity picks up.

“We have these new refineries coming up in China that were planned 3-5 years ago but China does not need the extra capacity right now, the world also does not need it. We are going to see margins getting worse for refiners in the region and more capacity will be shut,” said one trading source.

The world’s largest crude oil importer shipped out 4.52 million mt of gasoline, diesel and jet-kerosene in October, up 73% from the 2.62 million mt exported in September, General Administration of Customs data showed. The volumes were little changed from a year ago, which were weighed by a 72% collapse in jet-kerosene shipments due to the virtual grounding of international air travel.

One of the export quota recipient, Zhejiang Petrochemical Corp. (ZPC) was given 1 million mt. The company, which is majority owned by Rongsheng Petrochemical Co., is in the final stages of getting the second phase of its 800,000 b/d refinery up and running.

“One million mt for use in one month is a lot, most of this will end up as gasoline and that will have an impact on the market. We may have to brace for more such news next year,” the trading source said.

Drug makers Pfizer and BioNTech said on Monday that their vaccine was more than 90% effective in preventing COVID-19, raising hopes that the pandemic, which eroded global fuel demand, may be controlled, trading sources said. Crude oil surged on the news with ICE Brent up 6.1% on-day to $42.74/bbl as of 4:30 pm Singapore time.

A bumper 10 million-barrel spot crude oil purchase by Rongsheng Petrochemical suggests it is keen to get the second phase of its massive 40 million mt/yr, or 800,000 b/d, refinery and chemical project at subsidiary Zhejiang Petrochemical Co. Ltd (ZPC) running in the coming months, trading sources said.

Rongsheng announced in August plans to begin trial runs at the second 400,000 b/d tranche of the project in the fourth quarter of 2020 and looks set to achieve this aim despite COVID-19-related construction delays due to social distancing restrictions earlier in the year.

Market participants said Rongsheng was absent from the spot market for a couple of months and returned this week to buy the medium-sour Middle East cargoes, which led some to believe it was restocking but added that the scale of the purchase does point to some use in the new facility.

At the start of September, the November regrade was trading at minus $5.10/bbl, with Singapore FOB jet paper trading the equivalent of around $18.50/mt below Singapore FOB 10ppm sulfur gasoil paper. By the end of the month, the November regrade had bounced higher to minus $3.08/bbl, while FOB jet paper narrowed to just $5/mt below Singapore FOB 10ppm sulfur gasoil, a contraction of $13.50/mt over the month.

There was a similar pattern in Europe. Q4 2020 jet paper for cargoes arriving CIF northwest Europe was trading around $23.50/mt below Low Sulfur Gasoil futures. By the end of month, Q4 jet paper bounced back to $9/mt below distillate Low Sulfur Gasoil, narrowing the discount by $14.50/mt.

"Most of the European swaps, and it has been volatile, have been trading during the Singapore market-on-close," another trader said. "People think the worst is over, and there is talk of refiners continuing to cut jet production out of the slate, and also expectations some refineries will be axed next year."

But the volatility and liquidity of jet paper raises uncertainty over whether the rally in both the Asian regrade and European paper will hold over the winter. Trading was very thin for Q4 and Q1 jet paper to begin with, although it has started to recover, according to jet fuel traders.

At the end of April, fourth quarter jet cargo paper was trading at minus $3/mt on expectations of recovering demand. But the fourth-quarter swap levels collapsed during July as expectations of a recovery in jet fuel demand this year were dashed by further outbreaks of coronavirus and the imposition of more travel restrictions. By the end of August, the paper had slumped to minus $23.50/mt.

"I am going to quote you what the head of a major trading desk told me a few months ago. We don"t know where the jet paper should be," one trader told OPIS.

Indian refiners are cranking up runs strongly on the back of robust domestic gasoline demand and signs of a recovery in diesel consumption amid speculation that crude throughput may even reach 100% in December, trading sources with knowledge of the matter said.

Even though diesel and in particular jet fuel demand is well below year-ago levels, strong month-on-month growth has brought fresh optimism going first into the Dussehra festival in October, followed by Diwali in November, which trading sources said should trigger an increase in demand for transportation fuels.

Consequently, if runs are cranked up to full in December, crude oil trades will increase significantly from this month. Already there were signs of increased runs as purchases of November-delivery barrels rose, trading sources said.

COVID-19 restrictions in Egypt were introduced in March and were gradually eased throughout June. Commercial flights and international tourism to Egypt resumed on July 1.

India will be celebrating two major festivals in the coming months, firstly Dussehra in October, followed by Diwali, the important festival of lights, in November, which trading sources said should trigger an increase in demand for transportation fuels.

An OPEC+ move to extend the compensation period for nations that failed to fulfill output cuts to end-December suggest that the UAE, one of the bigger violator, is likely to stretch already announced crude oil supply reductions in October and November into December, trading sources said.

Abu Dhabi National Oil Co. (Adnoc), the biggest oil producer in the UAE, informed term customers of a 25% cut to November loadings on Wednesday after surprising the market early this month with a 30% reduction to all four of its export grades. The UAE pumped 3.11 million b/d in August or 520,000 b/d above its compliance target, the International Energy Agency (IEA) said in its monthly oil report published on Tuesday.

"Adnoc is already talking to its customers of a cut in December, there is no formal announcement yet like that for October and November," said one trading source, adding that most Middle East grades are currently trading at premiums to their official selling prices (OSPs) from discounts last month.

This is in line with similar downgrades by others including the IEA as COVID-19 continues to decimate oil demand, particularly jet fuel as much of global international flights stay grounded.

A string of very larger crude carriers (VLCCs) were snapped up in the past week as traders took the opportunity of tumbling freight to replace costly time charters (TCs) made earlier at the cusp of the super contango with bookings done at up to one-fifth the price six months ago, according to ship brokers, trading sources and fixtures.

The slew of charters raised expectations of a new round of a buy-now, sell-later trading strategy, or more commonly known as a contango or storage play, but traders said the forward price curve do not yet support such a move.

However, they were quick to add that current exceptionally cheap freight makes such a punt worth exploring as participants work to bring down their storage costs with some taking additional shipping length in the chance that a contango play develops. Such plays have earned trading outfits billions in profits and were also responsible for hefty earnings in the past quarter as oil companies grapple with low prices and poor margins due to the coronavirus disease 2019 (COVID-19)-led fuel demand destruction.

"The contango is not wide enough for an outright contango play. They were hired because tankers were cheap and if the crude market gets worse, then they can use it as contango play," one trading source said, adding that many of the fixtures were also replacements for those done on six-month TCs back in March and April.

According to shipping reports obtained by OPIS, 24 VLCCs have been booked on mostly three-six month TCs with one trading company having got the jump on others and managing to snap up at least four supertankers at below $30,000 per day with the cheapest at $25,000/day. The best deal on the list was for a 3+3-month booking delivered Singapore at $20,500/day, the list showed.

Later bookings were mostly done around the $50,000/day mark with most leading trading companies as well as Chinese national firms among the charterers, the list showed.

Included in the list are three newly-built VLCCs, the Hunter Idun, CSSC Liao Ning and the Babylon, which were laden with middle distillates in their maiden voyage and may continue to carry clean products throughout the TC period due to ample diesel and jet fuel supplies and a better contango structure, trading sources said.

Large oil companies with a strong trading team, such as Glencore, Vitol, Trafigura, Gunvor, bp, Total and so forth, holding deep pockets and capacity to execute such costly contango plays typically reap rewards in the billions.

For example, Dated Brent, used to price as much as two-third of all global crude oil, fell to a discount of about $10/bbl to front-month ICE Brent, they said. However, for now the numbers have yet to come anywhere near such a dire situation with Dated trading at flat to a modest premium to ICE Brent, they added.

However, the latest increase in output from the OPEC+ group and continued lackluster demand due to a resurgence of COVID-19 cases amid fresh lockdown measures have raised the specter of another super contango, the trading sources said.

Saudi Aramco is on cue to slash its October official selling price (OSP) to refiners in Asia by about $1.20/bbl for its biggest Arabian Light grade after below expectations cuts in September in the face of lower spot prices and a slowdown in fuel demand, trading sources said.

“All the Middle East barrels are overpriced, Aramco has to make a big adjustment after last month,” said one trading source, admitting that the producer did not face great difficulties placing its September-loading crude even though it only made minor cuts to its OSP.

The heavier Arabian Medium and Heavy grades may see a smaller reduction due to better fuel oil demand, the trading sources said, adding cuts maybe around the $0.90/bbl mark. The OSP of both blends were dropped by a similar $0.30/bbl to the Arabian Light.

Another component in the making of the OSPs is flows from Saudi Arabia, which is less than that allowed under the OPEC+ accord, the trading sources said.

“Saudi is producing about 300,000 b/d less than their quota in August, they should have raised it by 500,000 b/d but there is a shortfall. So it also depend if Aramco wishes to use up all this slack by pumping out more in October,” another trading source said.

Chinese state-owned refining majors plan to export the biggest volume of clean oil products since the depths of the coronavirus disease 2019 (COVID-19) pandemic in April as higher summer runs led to brimming local tanks forcing many to turn to the overseas market, trading sources said.

Chinese refiners went on an extensive bargain hunt in spring when ICE Brent crude prices sank to as low as under $20/bbl, which ended up in record shipments in the summer that is now extended to autumn, trading sources said.

These term deals were agreed with trading companies, said a buyer, adding that producers including Saudi Aramco, Abu Dhabi National Oil Co. (Adnoc) and Reliance Industries Ltd. also have trading arms.

The Philippines closure will be a boon to the overall Shell system, given its mega refining complex in Singapore with a 500,000 b/d processing capacity, which will now have a new captive outlet as the unit in Tabangao was operating at around 80-85% of capacity prior to its temporary closure in May due to COVID-19, trading sources said.

The permanent shutter will open up a new market for the recently-built refineries in neighboring countries such as the Maura site in Brunei and Pengerang in southern Malaysia, which will face stiff competition from a slew of new and old plants in China, trading sources said.

Chinese refiners went on an extensive bargain hunt in spring when crude prices sank to as low as under $20/bbl for ICE Brent, which ended up in record shipments in the summer that is likely to be extended to the autumn, trading sources said.

But despite the EPA"s recent measurement of refiners behind the curve in 2019, counterparties in the sulfur credit trading arena have let those compliance instruments slip in value. The drops are attributable to the demand destruction that has changed the dynamic for gasoline supply balances and octane differentials across the country.

Late word had sulfur credits most recently trading between $800 and $1,000 in a very illiquid market. At that rate, a 50-ppm off-spec cargo of foreign gasoline would require credit purchases that would add less than a nickel to the price.

Incidents of piracy reported to the International Maritime Bureau (IMB) totalled 47 in the first three months of 2020, up from 38 in the same period last year,global insurance carrier Allianz Global Corporate and Specialty

Those economics appear ready to change. Ethanol in bulk markets like Chicago and delivered destinations like Florida and New York Harbor is still far more expensive than CBOB, but futures trading points to different economics next month.

For Choudhury, even if U.S. gasoline demand can surpass and hold above 9 million b/d, demand for diesel and jet fuel aren"t likely keep pace given consumers" reluctance to fly and COVID-19-damaged international trade which has slowed truck transportation of goods across the U.S.

Transportation mobility was back to January levels in many Asian economies by early July, and up considerably from April and May, according to the International Energy Agency in its July Oil Market Report, in which it cited Google data.

China imported record crude oil volumes in June as savvy traders took full advantage of sagging prices back in March and April to ramp up purchases that could potentially lead to another all-time high in July before tapering later in the third quarter, trading sources said.

ICE Brent crude, which started trading at the start of the year at just under $70/bbl saw the bottom fall out in March when the OPEC+ producer group failed to agree on an output cut. Brent tumbled to a low of $22.71/bbl in end-March after Saudi Arabia and other Middle East producers opened their oil taps and slashed prices.

“The Chinese buyers bought a lot of spot barrels when oil was cheap. This is within market expectation, in fact July might even be higher as the port congestion eases and long haul cargoes arrive,” said one trading source.

However, shipments have picked in July as seen in recent shipping fixture reports but are still well short of typical levels due to COVID-19, which may lead to reduced refinery runs resulting in a longer period of lower imports, trading sources said.

OPIS has observed that the EIA "product supplied" number can be skewed by trading strategies, or by a rush to fill up stations ahead of predictable increases. Price volatility can manifest itself in massive "dispatch or delay" strategies from thousands of marketers and dramatically alter EIA assessments.

Last week, Hindustan Petroleum Corp. Ltd. (HPCL) sold to Aramco Trading Co. at $33-$34/mt to its own formula 28,000 mt for 20-22 July loading from Vizag, up from the plus $20-$21/mt for a June 19-21 cargo.

"TC5, or LR1 rate for AG/Japan 55,000 mt is trading below WS 70 and earnings are around $6,500/day, which is also very low for owners," Jayaraj added.

Saudi Aramco, the world"s largest crude oil exporter, raised its August official selling price (OSP) to Asian refiners by the most compared with term buyers in the rest of the world, reflecting signs that fuel demand in the region is better than elsewhere, trading sources said.

"It reflects the price structure of the market, Dubai is the strongest of the three benchmarks Aramco uses for its prices," said one trading source, pointing to a modest contango in Brent and WTI whereas Dubai is firmly backwardated.

"If Adnoc makes the same increase, Upper Zakum will be at a premium of $2.00/bbl to Dubai and that"s just crazy," said one trading source, adding that because of the thin Oman/Dubai spread Adnoc would be hard pressed to make a similar increase to that by Aramco.

The spread, which averaged around $3.00/bbl in April and May, narrowed to about $1.00/bbl in June, making it tough for Adnoc to follow Aramco"s lead as its crude oil for now are priced solely against Dubai, the trading sources said.

One consequence of the cuts was the tightening of medium-sour grades as Russia, one of the biggest participant in the exercise, slashed shipments of its Urals crude significantly, trading sources said.

The smaller increase versus the Dubai price structure is also due to volatile refining margins amid fears of a possible second wave of COVID-19 outbreaks, trading sources said.

Refiners are processing more so-called dumbbell crudes, a cocktail of very heavy and extra light grades, as part of efforts to limit jet-kerosene production as the bulk of global passenger aircrafts remain grounded, trading sources said.

"Last month, differentials for heavier grades like Basrah Heavy was so strong because of this demand. Refiners were balancing them against all the condensates and light U.S. crude they had bought," said one crude trading source, adding premiums rose to over $5/bbl for June loading compared with the current around $1.50/bbl.

At the same time, demand for residues as secondary unit feedstock and for use as marine bunker fuels or in boilers were just as strong, the trading sources said.

A huge inflow of light-sweet crude from the U.S. has landed in East Asia, including China, in June with more set to arrive in July and maybe even August, which brought about a resurgence in the demand for heavy grades, trading sources said.

"The crudes coming in were too light for the Chinese system, there was some percentage of sour grades but it wasn"t enough," said one trading source, adding that refiners topped up long-haul heavies such as Mars and Cold Lake with more Middle East grades including Basrah Heavy.

This month, Mont Belvieu non-TET C5 fell to a stunning 34-year low, according to OPIS TimeSeries data. On June 26, natural gasoline trading out of the Enterprise Products Partners storage caverns plunged to 23.25cts/gal. That"s a 46% decline since June 22, when the price was an average of 43cts/gal. The last time prices were lower was on Aug. 4, 1986, when C5 averaged 22.5cts/gal.

After a slight drop on June 23, the bottom fell out the next day, to 33.5cts/gal and then down to the current level. Prices have started to recover over the last few trading days of the month. In early trading Tuesday, the range was up to 28-30cts/gal. This may be a signal for an even bigger jump forward once the calendar turns to July.

CPC Corp. usually sells gasoline and has not bought any on an open tender basis in the last five years, according to OPIS records, but it may have bought via private negotiations, trading sources said.

Under its domestic pricing mechanism, refined oil products are adjusted when international crude oil price changes translate to a change of no less 50 yuan/mt ($7.10/mt) for gasoline and diesel within a period of 10 working days.

HFRN, favored for aromatic production, is trading at a discount of $1-$2/mt to open specification naphtha (OSN) with minimum paraffin of 65%, in a reversal of H1 July, when it fetched $1-$2/mt premiums, OPIS data show.

The restart of the 300,000 b/d Petronas-Saudi Aramco joint venture Pengerang Refining and Petrochemical (PRefChem) facility after an explosion was pushed back due to manpower issues leading to the sale of several million barrels of crude oil that were in floating storage, trading sources said.

In many cases refiners were forced to delay maintenance until workers could safely get to the site but in other cases that require specialist foreign staff, the works were pushed back to later in the year once international air travel were lifted or exemptions given. Malaysia eased local restrictions earlier in June after three months but its borders remain closed.

"I don"t want to say it"s been suspended indefinitely but that"s why they were confident in selling these crude oil cargoes," said one trading source, adding that Aramco Trading Co. sold three very large crude carrier (VLCC) loads of Murban and one of Agbami.

Trading sources said it made sense that the cargoes were sold in the spot market once it became clear that an imminent resumption of operations were not in the offing as current prices made the trades worthwhile amid a losing proposition of keeping them in storage in the absence of a profitable contango.

The Murban was probably bought at a discount of around $4/bbl to Dubai if they were loaded in early April and sold this week at premiums of as much as $1/bbl, which is a good deal, said one trading source, noting that onshore crude oil tanks in Pengerang were also filled to the brim.

More recently, S.F. CARBOB spot market trading around 14cts/gal above RBOB futures, or about $1.32/gal Tuesday around 12 p.m. ET, put the Bay Area gasoline "crack" at about $15/bbl over Brent crude, a far cry from the $20-$30/bbl cracks seen during other recent California driving seasons.

Demand recovery and refinery run rates are the two uncertainties trading sources consistently raise when discussing Asian crude oil imports in the coming months and its impact on prices now that the OPEC+ group have got a handle on supply.

However, whether the OSP increase and possible reluctance among term buyers to take full contractual volumes would draw out crude oil currently in storage as part of the contango trading strategy or even flush out clean products on board vessels in place of higher refinery runs is still a big unknown, they said.

“The preference for sour barrels is there,” said one trading source, which suggest refiners would at least take contractual minimum in the extreme with most likely to load full volumes since the Middle East barrels are only less economical than a few supply sources such as the U.S. Gulf Coast.

Trading sources said Asian refiners will seek out their favorite deep-sea spot sour crude such Johan Sverdrup, Grane, Forties, CPC Blend, Urals as well as U.S. cargoes such as WTI and Thunder Horse. Latest shipping fixtures show more volumes heading to the region from Mexico, which is pulling back from the OPEC+ cuts.

“If refiners crank up runs by a lot during this recovery then all of the oil products that are in storage won’t be used up and the oversupply situation won’t be resolved,” another trading source said.

Using a live trading platform, theOPIS450 Europe Jet Tickerconverts bids, offers and deals in the barge jet fuel market into a price mark for each minute between 9:00 a.m. and 4:30 p.m. London time. The average of those 450 prices creates a value for the entire trading day, providing carriers and suppliers with an accurate and impartial market assessment. Combine the all-day visibility of the Ticker with the expert market commentary found in theOPIS450 Europe Jet Fuel Reportand you have a complete and transparent picture of each day"s entire activity.

CIF ARA propane prices extended its two-month run holding a premium to CIF NWE naphtha, with propane/naphtha trading at +$53/mt at the start of May, down from a high of +$131/mt recorded on April 21, but still atypical going into the summer months when propane usually trades at a discount due to the lack of heating demand. By comparison, the propane/naphtha spread was minus $139/t in May 2019. A petrochemical producer with feed-flexible coastal facilities in the Netherlands and Spain made repeated propane cargo resale attempts last month.

Petron Singapore Trading, which buys for the Philippines market, sought up to 150,000 bbls of 87 RON and/or up to 150,000 bbls of 92 RON for loading on July 1-6 via a tender this week.

Plans by the Chinese provincial Shandong government to build a mega refining-cum-petrochemical complex is unlikely to lead to a glut of oil products due to its high integration and the probable closure of several teapot plants as part of a consolidation exercise, analysts and trading sources said.

"The extent of its impact will hinge on whether the smaller, less competitive teapots close in tandem with Yulong"s upcoming capacity," said one trading source that has dealings with refiners in that part of China.

"I do believe that the smaller refineries will benefit by but within the whole structure of the new entity, they may not be satisfied when they are used to be the big boss making all the decisions," another trading source said.

In addition, an arbitrage pricing window between ANS and Asian markets has opened since the start of April, with Middle East crudes delivered to Asia trading at an average of $5/bbl above ANS so far in Q2 2020, resulting in three rare cargoes of ANS exported to China between late April and May, Fielden said.

Gasoline Eurobob barges prices, in the Amsterdam-Rotterdam-Antwerp trading hub of northwest Europe, saw crack spreads widen to negative $8.37/bbl in April, from negative $2.85/bbl on average in March, before recovering to an average of negative $1.75/bbl in May.

Chinese buyers paid a premium for their jet fuel cargoes against Singapore prices for the first time in more than six months in a sign of improving market fundamentals as more airlines take to the sky and production is still curtailed, trading sources said.

Shipping fixtures showed that Mitsui Energy Trading Singapore (METS) booked the Pacific Jewel to load 30,000 mt of jet fuel from South Korea on May 26 to Shanghai at an undisclosed rate.

"We may not see a real recovery until international flights increase. Some travel agencies started offering overseas trip programs, but only for trips from August," said the analyst.

Distressed North Sea crude is once more finding a home in East Asia, particularly China, as refiners there increasingly look to unsold cargoes to fill the gap left by the OPEC+ output cut and production shut-ins, according to trading sources and shipping data.

“The North Sea barrels that’s been floating for a while will start to clear, some of them will end up in STS (ship-to-ship) operations with the VLCCs that were booked,” said one trading source, adding that resumption of refinery runs in some European countries such as Germany will also aid in the absorption of the regional supply overhang.

The data also showed that Russia had usurped Saudi Arabia as the largest supplier last month, which went some way towards explaining the kingdom’s decision to open its taps and slash prices in April, trading sources said.

The optimism associated with expectations for a sharp demand recovery, as seen in China, has led refiners to also announce plans to crank up crude throughput, which has translated into fresh spot crude oil buy tenders after their term barrels were reduced in line with the OPEC+ output cuts, trading sources said.

IOC brought back online crude units at refineries in Panipat, 150,000 b/d after a near two-month maintenance and refurbishment program earlier this month, in Paradip, 160,000 b/d after about 10 days works in late April, and in Paradip, 120,000 b/d following an almost month-long turnaround that finished this week, according to the reports and a trading source.

Trading sources said that Indian refiners such as the two-biggest, Reliance Industries and IOC, were picking up incremental barrels from West Africa as well as from the U.S via tenders.

Chinese fuel demand recovery is likely to taper off in the second half of this year after a spectacular V-shaped rebound from the coronavirus disease 2019 (COVID-19), which is also taking shape in countries that have relaxed lockdown measures, according to an IHS Markit report and trading sources.

Crude oil fundamentals have improved significantly in the past week as the OPEC+ output cuts continue to crimp supplies pushing buyers, especially China, to pick up incremental barrels from the spot market, sending differentials soaring high into the positives, trading sources said.

“The June allocations from Middle East producers were confirmed to Asian customers. Saudi Arabia has cut a lot, even refiners in China and India received cuts. That’s why there’s a lot more demand for spot cargoes,” said one trading source.

Trading sources said China is likely to emerged as a big spot buyer if the economics work in bringing long-haul cargoes to their shores as local refiners hike runs on the back of renewed industrial activities and transport fuel demand as coronavirus disease 2019 (COVID-19) restrictions are relaxed.

Deploying technology to scrub ship exhaust emissions remains more economically viable than burning fuel oil with a lower sulfur content, chief shipping analyst at Baltic and International Maritime Council (BIMCO) Peter Sand told OPIS on Monday.

Many shipowners expected a fast payback from their investment in scrubbers, indicated by forward swaps curve values for high- and low-sulfur fuel oils after the implementation of new International Maritime Organization legislation on Jan. 2 this year, which mandated the use of very-low-sulfur fuel oil unless an exhaust gas scrubbing system was onboard.

Prior to the US declaring pandemic conditions, toluene was trading around 85 cts/gal above RBOB. Today, that spread is nearing 20 cts/gal. The best prices that high-quality toluene have seen recently were from certain solvent chemical markets, but demand is too shallow to have any meaningful impact.

Mixed xylenes (MX) markets are also suffering from low demand from both chemical and gasoline sectors, but to a lesser extent than toluene. A brief arb to Asia alleviated some of the MX oversupply, but its price tanked 10 cts/gal when that activity ended, hitting a new low of 23 cts/gal over RBOB. Like toluene, MX was trading at more than 80 cts/gal above RBOB prior to the pandemic.

OPIS PetroChem Wire"s Daily Wireprovides closing prices and a summary of the day"s trading activity for US ethylene, proylene, polymers and upstream NGLs markets. Begun in 2007, its olefins and polyolefins prices serve as benchmarks for a number of physical and swap contracts that trade on the CME/NYMEX Clearport system.

The front-month contract for RBOB futures on the NYMEX exchange, which had been trading as high as $1.66/gal in February, hit a recent low of 49.47cts/gal on March 23 - a drop of about 70% -- before slowly climbing back to average 89.66cts/gal last week.

Front-month June landed Northeast Asian LNG prices rose to $2.3/MMBtu, 16.5% higher than the previous trading day and 24.3% more than at the start of last week on April 27, according IHS Markit OPIS assessments.

For first-half July, India"s Reliance bought a cargo at around $1.85/MMBtu, while a second Korean buyer could be seeking an early July cargo, trading sources said.

"Crude was trading at huge discounts, ending in the negative price on WTI," he said. "Then the OPEC+ output cuts started to impact, suppliers were telling us of 20%, 30% cut in volumes and the contango started to come. All of which looks like a perfect V-shape recovery.

More than a month ago, the front-month Dubai spread fell to as low as $4/bbl in contango for May/June before recovering to minus $1.20/bbl with June/July as the new front month about a week ago. This spread narrowed to $0.60/bbl in contango this week with the new July-August months, one trading source said.

They said a narrowing of the spread has made the contango-storage trading strategy uneconomical even as very large crude carrier (VLCC) rates slumped to levels not seen since early April when the market was flooded as Saudi Arabia and other Middle East producers opened their oil taps and slashed OSPs after an OPEC+ output talk broke down.

"China is buying a lot of Brazilian and other Latam crudes and will turn to North Sea next," said one trading source, adding that huge cuts to Russian Urals output on the back of higher European refinery runs should keep flows of this medium-sour grade away from Asia low unlike in end-March/first half April.

Global crude oil demand is expected to continue to remain significantly depressed in coming months -- IHS Markit projects a year-over-year decline of 22 million b/d in the second quarter of 2020, and the International Energy Agency expects average demand for the year to contract by 9%, or 9 million b/d.

Jet fuel exports in March, on the other hand, shrunk 7.04% from the previous month to 488,000 mt despite bearing the brunt of the demand destruction with the suspension of both domestic and international flights.

That assessment, however, may represent an overstatement. Trading companies put away extra gasoline early in the month to take advantage of an unprecedented contango play for storage, and the amount of fuel pumped was probably lower than EIA numbers, which merely measure gasoline moving from reportable to non-reportable storage.

Crude oil trading on Monday, April 20 saw the eyes of the world descend upon the NYMEX, as negative numbers wreaked havoc with small speculators and with back office software on several continents. OPIS" crude oil database saw occasional negative posted prices during the last third of the month, with particular weakness for Wyoming, North Dakota, Montana, Texas and the Ohio/Pennsylvania Utica Shale.

Refining margins for very-low-sulfur fuel oil (VLSFO) in the trading hub in and around Rotterdam have plummeted to negative territory for the first time this year amid a decline in demand caused by the coronavirus disease 2019 (COVID-19) pandemic, OPIS data shows.

"I"m not surprised to see VLSFO cracks narrowing as stocks were building prior to January, then demand started to fall due to the virus but production increased, so VLSFO supply is clearly outpacing demand," said Anton Shamray, senior research analyst at global bunker trading company Integr8 Fuels to OPIS Thursday.

Several other oil companies have followed ExxonMobil"s lead and inserted language in bulk contracts that specifically outlaws negative prices for gasoline, diesel, heating oil and jet fuel. ExxonMobil was the first company to employ these clauses, and while at least one major commodity trading house rejected the terms, OPIS sources say that other multiple counterparties have agreed to the language.

This previously envisaged scenario is now a concern in the face of two opposing forces -- crumbling demand and soaring freight -- that has led to free-on-board (FOB) prices exposed to the vagaries of the shipping market, which is now a kingmaker in the oil trading business. This is particularly so in the Middle East, whose price is derived from established benchmarks in another location.

The latest sharp decline on WTI has raised fears once more that when the front-month contract nears expiry it may again test the negative territory. The negative settlement had led to huge losses among retail investors who were trading this futures contract.

"Daily fluctuations and trading play could cause [jet fuel prices] to drop lower like we have seen for WTI futures earlier this week, which fell into negative territory," Chew said on Friday.

"I can definitely see Middle East jet fuel prices plummet to negative figures," a trading source told OPIS, as better refining margins are likely to incentivise local refiners to maximise diesel production compared to jet fuel.

Much of the daily volume in NYMEX products trading revolves around inter-product spreads, and the "spread du jour" today and for many other spring days looks like the buy RBOB/short ULSD play. Even before today"s Energy Information Administration report, that spread strategy was attracting fans and it may get a further boost from today"s data as well as future EIA reports through May.

The renowned founder of Singapore oil trading firm Hin Leong Trading (HLT), Lim Oon Kuin, has stepped down as the company"s director and managing director, according to a court filing that also suggested he hid $800 million in derivatives trading losses.

HLT is the first known Asian trading company to battle financial troubles amid a precipitous fall in oil prices. Whiting Petroleum in the US had filed for bankruptcy protection earlier this month.

There"s a sense that spread trading has accounted for much of the damage in diesel prices in April. Spread plays require much less margin than outright positions in futures, and those 50ct/gal premiums have narrowed to about 18ct/gal more recently. Heavy action in spreads often "creates its own eco-system" in the futures markets and can often dwarf typical buy or sell-side hedging, sources observe.

Consequently, at least 2-3 VLGCs were chartered so far as floaters with onshore tanks filled to the brim, said trading sources, adding that lockdown measures, which make worker movements difficult have worsened the supply chain logistics that"s already stretched by India"s limited LPG storage capacity.

The effort came against the backdrop of some U.S. spot markets trading in the 20s for various blendstocks, with many formulae deals on the books at large discounts to NYMEX references. Last week, OPIS confirmed rack prices at less than 10cts/gal, and there were worries that spot transactions might descend to where a discount of 40cts/gal to futures might result in a negative price. The clauses for the deals were reportedly invoked for spot deals on the Colonial Pipeline tied to front-month NYMEX products contracts.

What"s not known is whether any buyers agreed to the terms. At least one large commodity trading house saw its legal experts reject the terms, noting that "negative pricing" has occurred in recent years in natural gas and electricity.

ICE Brent futures initially fell following news of the agreement but rebounded later in the day. At 9 a.m. ET, June Brent futures remained down by 25-30cts and trading at $31.21/bbl. May WTI futures were holding small gains of about a dime at $22.84/bbl. The front-month Brent futures jumped almost 53% from a low of $22.71/bbl on March 31, prior to news of a possible deal, to close at a high of $34.65 on April 3, the data show.

"The market is quite disappointed. Brent came off a bit this morning, the 9.7 million b/d output cut is not enough to offset demand loss. It will only try to delay tank top situation," said one Singapore-based trading source, adding that Saudi Arabia pumped a lot this month and these cargoes will need to go into storage first before a clearer picture of market fundamentals emerges.

Another facet of the agreement was that members of the International Energy Agency (IEA) and other major consumers would add 3 million b/d of oil to their strategic stockpile in the coming months. This, as seen in previous IEA commitments, is a bureaucratic process that will take time to materialize.

The aviation sector is one of the hardest hit by the coronavirus 2019 disease (COVID-19) pandemic, which has seen countries across the globe impose domestic and international travel restrictions.

Data from travel analytics company ForwardKeys shows that global international airline seat capacity for the first week of April declined by more than 77% to 10 million seats from 44.2 million the same time a year ago.

"After international travel resumes, we expect a lingering downward effect from fear of traveling, lower business travel, potential border entry restrictions, and of course the economic fallout from job losses. Upside will have to come from airline and travel operators offering low prices and flexibility," Budds added.

Using a live trading platform, theOPIS450 Europe Jet Tickerconverts bids, offers and deals in the barge jet fuel market into a price mark for each minute between 9:00 a.m. and 4:30 p.m. London time. The average of those 450 prices creates a value for the entire trading day, providing carriers and suppliers with an accurate and impartial market assessment. Combine the all-day visibility of the Ticker with the expert market commentary found in theOPIS450 Europe Jet Fuel Reportand you have a complete and transparent picture of each day"s entire activity.

As a result, LPG cracking became uneconomical with the propane/naphtha ratio assessed at 142.9%. The ratio compares the first physical trading cycle for naphtha, with the second cycle for the CFR Japan price of 23,000 mt propane.

Stock in the company, which had reached a 52-week high of $30.94 per share about a year ago, ended the session Tuesday at 67cts per share. The stock was off more than 43% Wednesday afternoon, trading at 38cts/share.Whiting"s announcement marks the first high-profile company to fall victim to the ongoing dispute between Russia and Saudi Arabia, which began in March after Russia refused to go along with an OPEC plan to cut production to support energy prices during the virus-related fall in global energy demand.

Spot ethylene prices have moved into single-digit territory, with April trading at 9.25 cts/lb (27.5 cts/gal equivalent) at Mont Belvieu, according to OPIS PetroChem Wire. These are historic lows for ethylene; previous lows in past years were 10 cts/lb. Steam cracker operating rates were still relatively high in the USGC, with only three of the region"s 50 olefins units shut (for maintenance). Ethylene"s forward curve is also in contango, however slight. May ethylene at the Mont Belvieu NOVA hub was 9.5 cts/lb and June was 9.75 cts/lb.

OPIS PetroChem Wire"s Daily Wireprovides closing prices and a summary of the day"s trading activity for US ethylene, proylene, polymers and upstream NGLs markets. Begun in 2007, its olefins and polyolefins prices serve as benchmarks for a number of physical and swap contracts that trade on the CME/NYMEX Clearport system.

The crash hit a crescendo on March 23, when prompt vintage current year CCAs traded at $11.05/mt -- a price unseen since the inception of the emissions trading scheme. Four weeks before, on March 2, OPIS assessed the value at $17.82/mt.

The week before -- when CCAs took the largest nosedive -- 100 million CCAs exchanged hands "which is close to what we think the speculative length was in the market," analyst firm Clearblue Markets Managing Director of Markets Nicolas Girod told OPIS. Volume during a typical trading week is between 5 million and 10 million allowances, he said.

Sources told OPIS that Mexico diesel demand is being impacted by the direct damage COVID-19 inflicted on international supply chains. In comparison, gasoline demand has fallen 3.7% YOY to 768,500 b/d during the second week of March.

OPIS PetroChem Wire"s Daily Wireprovides closing prices and a summary of the day"s trading activity for US ethylene, proylene, polymers and upstream NGLs markets. Begun in 2007, its olefins and polyolefins prices serve as benchmarks for a number of physical and swap contracts that trade on the CME/NYMEX Clearport system.

Using a live trading platform, theOPIS450 Europe Jet Tickerconverts bids, offers and deals in the barge jet fuel market into a price mark for each minute between 9:00 a.m. and 4:30 p.m. London time. The average of those 450 prices creates a value for the entire trading day, providing carriers and suppliers with an accurate and impartial market assessment. Combine the all-day visibility of the Ticker with the expert market commentary found in theOPIS450 Europe Jet Fuel Reportand you have a complete and transparent picture of each day"s entire activity.

As China faced up to the worst of the COVID-19, the China Council for the Promotion of International Trade (CCPIT) announced that it would help affected companies apply for force majeure actions, which essentially excuses them from contractual obligations due to events beyond their control.

As it becomes more apparent that the impacts of coronavirus disease 2019 (COVID-19) on domestic and international travel could potentially go on for weeks, if not months, jet fuel traders and suppliers on the U.S. West Coast are working together to avoid supply lockups as storage tanks fill.

Cutting batches may not be something air carriers want to do, but with the top five airlines at Los Angeles International Airport (LAX) recently announcing large reductions in capacity over the coming weeks, it"s something they will all have to do.

American Airlines said March 10 that it will reduce international capacity by 10%, including a 55% reduction in transpacific capacity, and decrease domestic capacity by 7.5% in April. American Airlines flights accounted for 20.55% of passengers at LAX in January.

Delta Air Lines said March 10 that it would reduce international capacity by 20%-25% and decrease domestic capacity by 10%-15%. Delta flights made up 17.56% of the LAX market in January.

United Airlines said March 20 that it would reduce its international schedule by 95% for April, including a temporary suspension of all flights to Canada, effective April 1. United flights accounted for 13.50% of market share at LAX in January.

Using a live trading platform, theOPIS450 Europe Jet Tickerconverts bids, offers and deals in the barge jet fuel market into a price mark for each minute between 9:00 a.m. and 4:30 p.m. London time. The average of those 450 prices creates a value for the entire trading day, providing carriers and suppliers with an accurate and impartial market assessment. Combine the all-day visibility of the Ticker with the expert market commentary found in theOPIS450 Europe Jet Fuel Reportand you have a complete and transparent picture of each day"s entire activity.

Sandy Fielden, director of oil and products research at Morningstar in Austin, Texas, said Brent"s rapidly collapsing premiums to WTI at $1.74/gal on March 13 barely covered the pipeline shipping costs for WTI from Cushing to the U.S. Gulf Coast, let alone the freight costs to overseas markets, rendering WTI less competitive versus Brent from Saudi and Russian barrels in international markets.

The big unknown, they both agreed, is how long fuel demand remains crimped, which makes the most advantageous trading strategies at this time of extremely low allowance prices unclear.

Meanwhile, with secondary-market CCA prices trading well below the program"s quarterly auction reserve price, there is a good chance that if that continues to be the case, the next auction, in May, could be undersubscribed, according to Clear Blue Markets analyst Nicolas Girod.

Qantas and its budget carrier Jetstar will stop all international flights from the end of March and temporarily layoff two-third of their 30,000 staff. More than 150 aircraft will be grounded during this period.

Immediate and steep production cuts and international collaboration could mitigate the damage. However, it is possible that Saudi Arabia is giving up its role as the balancer, as it is no longer willing to defend oil prices by cutting output only to see others increase theirs, IHS Markit said.

Oil market participants were greeted today by U.S. wholesale gasoline prices trading at or below the price of crude oil which results in narrow to nonexistent crack spreads. Take gasoline, for example. At settlement, West Texas Intermediate (WTI) futures were $28.70/bbl and RBOB futures were valued at 68.99cts/gal, or $28.98/bbl. Brent crude futures closed at $30.05/bbl.

He also sees a reversal in a distillate market dynamic that was in play just before and after the International Maritime Organization (IMO) low-sulfur fuel rules went into place Jan. 1.

A change in position will not be easy in the immediate term but does not appear impossible, said Flores, who also is the former Secretary General of the International Energy Forum based in Riyadh, Saudi Arabia.

The administration could retake the international leadership role Mexico has played in the past to build a constructive dialogue among producers and consumers during difficult times, Flores said.

The panorama for refined products seems weak. In 2018, the International Energy Agency projected a start-up of 7 million b/d of new capacity by 2022-2023; meanwhile, demand would increase of 5 million b/d, Flores said.

The COVID-19 coronavirus pandemic will hurt demand growth, he added. All international and government agencies have cut their oil demand growth forecasts.

IHS Markit OPIS calculates the propane/naphtha ratio by comparing the second physical trading cycle for CFR Japan propane against the first trading cycle for CFR Japan naphtha.

Amid the weak demand outlook, several trading firms and majors in Asia have also been seeking VLCCs to use as floating storage, as reported by OPIS earlier.

Mexico"s retail prices have been slow to pass savings from the drop experienced in the international market to end consumers. Regular gasoline prices have fallen only peso 0.5/liter since Feb. 2, when Mexico stopped subsidizing fuel prices.

Petroleum futures trading on Monday took U.S. benchmark West Texas Intermediate on NYMEX down to $31.31/bbl, off by $10.15/bbl which was the largest one-day drop for the contract since Operation Desert Storm in 1991. Compared to where WTI began 2020 ($61.18/bbl), the crude"s price has fallen by about 49%.

As reported on March 9, Australia"s Energy Minister Angus Taylor said he would be travelling to the United States this week to sign the agreement, which "will enhance Australia"s resilience to international fuel disruptions by increasing our oil stockholdings."

The agreement solves both a political and supply problem for Australia, where the country"s strategic reserves fall below levels required by the International Energy Agency (IEA). Australia, which imports 90% of its liquid fuels, has enough oil in storage to last 54 days, according to local reports.

--HSBC: The international bank drastically reduced its forecasts for Brent and WTI, dropping the benchmark targets to $49/bbl and $44.80/bbl, respectively.

Spot prices for propane and butane in the Mont Belvieu and Conway trading hubs heading into the afternoon have rebounded off historic lows recorded this morning, but concerns remain high for longer-term prospects amid the upheaval in global markets.

May ICE Brent futures were at $33.90/bbl as of 9:55 am Singapore time, over 36% lower than Singapore"s close of $49.08/bl last Friday. The last time crude futures fell by over 30% between trading sessions was at the start of the first Gulf War in January 1991, according to data from the Energy Information Administration.

May Singapore 0.5% sulfur fuel oil swaps fell by a similar magnitude of 23% to $293.50/mt during morning trading while its crack spread rose by almost $2/bbl to $8.77/bbl.

Rongsheng Petro Chemical Co, Ltd. specialises in the production and marketing of petrochemical and chemical fibres. Products include PTA yarns, fully drawn polyester yarns (FDY), pre-oriented polyester yarns (POY), polyester textured drawn yarns (DTY), polyester filaments and polyethylene terephthalate (PET) slivers.