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’Is fuel oil changing everything?
Fuel oil: a byproduct of the petroleum distillation process, usually considered either a distillate or a residue.
Or as Wikipedia explains:
The term fuel oil is also used in a stricter sense to refer only to the heaviest commercial fuel that can be obtained from crude oil,
Fundamentally speaking…
From Olivier Jakob at Petromatrix on Wednesday:
While crude oil futures continue to be supported by the Iranium premium, the products are not following and the light-end cracks are suffering further. The Naphtha and RBOB cracks to Brent are going as we expected deeper into negative territory and the pressure is now also coming to the European Distillates physical premiums.
The Asian fuel-oil indicator
A particular grade of Asian fuel oil has, for want of another word, skyrocketed in price over the last few weeks.
The grade in question is called 380-centistoke, and its cash differential (versus the benchmark grade) has performed as follows:
Time to start watching the uranium-fossil spread
If energy markets were ever confused, it’s now.
On the one hand the Japanese earthquake immediately implies bearishness for crude oil on account of lower demand. On the other hand it implies a hike in demand for refined products.
That Opec effect on fuel cracks
When Opec first started cutting crude production back in October, one of the immediate effects on the market was a pullback in the supply of heavy sour crudes.
As we noted before, this is because Saudi Arabia, Opec’s largest and most proficient swing producer,