Crude Oil
Oil rose slightly as global markets steadied on Thursday, recovering some of the previous day’s 2 percent slide, though a weakening outlook for crude demand kept prices in check. Brent crude oil futures settled 67 cents higher at $71.43 a barrel, while U.S. crude futures rose 45 cents to $65.46 a barrel.
Earlier, U.S. crude had hovered around its 200-day moving average of $65.18 a barrel, an important technical benchmark. Moving below that level could trigger a further surge downward. Brent crude futures are also fairly close to the 200-day moving average for the first time in a year..
Asian demand is showing signs of slowdown as trade disputes and a stronger dollar drag the economies of some of the world’s largest oil buyers.
Naphtha
Asia’s naphtha crack fell to $105.85 a tonne yesterday. Japan’s Mitsubishi Chemical was in the market seeking cargoes but no results were heard. Markets expect supplies to be higher going forward due to more Western cargoes streaming in September than in August. Yasref was also offloading heavy full-range naphtha as it did not need the fuel as feedstock for its reformer.
The August crack has dropped to $ 0.15 /bbl. September is at -$ 0.20 /bbl
Gasoline
Asia’s gasoline crack fell on Thursday but remained close to its highest level this year due to supply disruptions in India after Reliance Industries declared force majeure on gasoline supplies the previous day. Saudi Arabia’s Yasref was also hit by gasoline production problems after it had to shut a reformer.
Overall, Asia was not expected to be hit by severe gasoline supply shortages as Yasref cargoes are mostly not destined for the East. Additionally, China continues to produce abundant amounts of gasoline, with its July petrol output seen at a record high of nearly 12 million tonnes.
Singapore onshore light distillate stocks, which comprise mostly gasoline, were at a four-week low of 14.243 million barrels, 9 percent below the record high levels set in late March this year.
The balance August crack has dropped to $ 11.10/ bbl. The September crack is at $ 10.05 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10 ppm sulphur content rose to 19 cents a barrel to Singapore quotes, up from 17 cents a barrel on Wednesday. Cash differentials for jet fuel narrowed their discounts to 14 cents a barrel to Singapore quotes, compared with a discount of 19 cents a barrel on Wednesday.
Singapore onshore middle distillate stocks dipped 1,000 barrels in the week to Aug. 15 to an eight-week low of 9.08 million barrels. Since the start of the year, Singapore middle distillate inventories have averaged 9.2 million barrels a week, compared with a weekly average of about 12 million barrels in 2017. Overall, onshore middle distillate inventories were 33 percent lower than a year ago.
China’s diesel output fell to 14.46 million tonnes in July from 14.83 million tonnes in June. July kerosene production rose 19.6 percent year-on-year to 4.14 million tonnes.
The balance August crack is steady at $ 15.35 / bbl with the 10 ppm crack at $ 16.25 /bbl. The regrade has improved to $ -0.40 /bbl.
The September crack is at $ 15.10 / bbl with the 10 ppm crack at $ 16.00 /bbl. The regrade is at $ 0.35 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Inventories in Singapore rose for the first time in three weeks, in line with market expectations of gradually improving arbitrage flows into city-state. Higher net imports of fuel oil into Singapore in the week ended Aug 15 lifted onshore inventories from a nine-year low.
However, a lack of finished grade bunker fuels continued to lend support. The September 380-cst barge crack against Brent crude climbed to about -$8.60 a tonne by Asia close on Thursday, up from -$8.80 a tonne in the previous session.
Singapore’s weekly onshore fuel oil inventories rose to a three-week high of 15.272 million barrels, about 2.279 million tonnes, in the week ended Aug 15.
The balance August 180 cst crack is lower at -$ 1.60 / bbl with the visco spread at $ 0.95 /bbl.
The September180 cst crack is at -$ 2.25 / bbl with the visco spread at $ 1.25 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing new to report.
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About this blog
This blog post attempts to give a top level summary of the Singapore market goings on to a person who seeks to obtain a directional sense of the market on a daily basis.