crude markets – Bull fest continues – Fuel oil markets correction – price trend in India
crude flat prices continued to rise modestly this week, ending Brent in 7.64 pct gains to close above $110 on Friday. Brent WTI spread widened. Middle eastern grades traded in high premium. “The largest supply disruption in the history of global oil supply market” triggered oil prices. On the technicals side, Speculators held the net length in crude F&O as per Market positioning data through the week ending 17th March. Traders and Investors remain optimistic over the short conflict and early reopening of SoH albeit political statements are mixed. Time spreads movement indicated market tightness as the Middle Eastern benchmark curves turned into deep backwardation over the supply shortages. Mixed inventory reports lent support to oil complex. Consensus is that oil prices will continue to increase until the conflict is resolved or the Strait is opened by force. The gap between perceptions and reality will continue to widen till that time.
Fuel oil markets
Fuel markets in Asia at SG trading window demonstrated controlled consolidation from panic driven spike. HSFO dropped around 25 pct while VLSFO dipped around 15 pct during the week. Scrubber demand, Russian inflows, Profit booking and Refineries prioritising distillates are the factors in fuel oil markets this week. Indian refineries revised up RSP for MS, FO, LDO, Bitumen, Solvents and other industrial fuels for the second half of March.
