The crude market was buoyed by comments from Russia reporting its oil output had nearly dropped to its target of 8.5 million barrels per day (bpd) for May and June under its supply cut deal with OPEC.
After a bank holiday yesterday and quiet trading, counterparties have come into the market this morning with renewed optimism. Adding further fire to the flames is news from Friday that showed the United States’ rig count hitting a record low of 318 in the week to May 22. This not only indicates that the low prices have taken its toll on the US industry, but also that future US production could be impacted.
In product news, the Singapore gasoil spreads are flattening, especially in the nearby months, and the gasoil EW continues to charge into positive territory.
The gasoil front month spread has been over $1 at one point several weeks ago, but this has moved in to almost flat. The Gasoil EW began its move upwards at the end of last month and has now sustained positive levels for several days now.
The new 0.5% grades of fuel remain relatively stable on their spread to the gasoils (FOGO spreads) but will, of course, be impacted by the above spread movements.