Week 17 Pricing Analyst Update – Nadia Riaz – AG – Cross Barrel
The Arab Gulf remains highly volatile. Despite a ceasefire, stalled diplomacy and naval blockades continue to restrict physical flows, keeping a strong geopolitical risk premium in place
– Gasoline markets are trading rangebound with a softer tone, as participants increasingly price in a swift resolution to the conflict. At the same time, supply is tightening sharply following Kuwait’s force majeure declaration early this week. In the spot market, Pakistan’s PSO has secured 55,000 metric tons for May delivery, underscoring continued buying interest. Regional supply also faced further friction as Attock Refinery was forced to shut its main crude distillation unit due to abrupt logistics constraints in Islamabad.
– Near-term gasoil fundamentals are softening, with 10ppm values falling sharply to roughly +$10/bl. “Price levels have come off considering the crunch in spreads,” a middle distillates trader said.
– UAE’s Fujairah stocks have fallen below 10 million barrels for the first time in nine years, signalling tighter prompt supply and providing support to prices. Distillates (diesel and jet fuel) are leading the strength with firmer cracks, while gasoline and naphtha are also trending higher on reduced availability.
– Iran partially reopened its airspace on 18 April, following a full closure that had been in place since 28 February. Despite this, AG jet fuel exports remain largely softened, with jet fuel cracks around the higher end of the low $20s per barrel range.
– Naphtha backwardation strengthened sharply, with the May–June swap spread surging to $77/mt. Meanwhile, tender activity earlier in the week pointed to easing premiums, as India’s BPCL sold May cargoes at $160/mt over MOPAG, down from earlier levels near $210/mt.
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