Crude Oil
Oil prices ended the day slighty higher as slowing economic growth battled shutdown production in the US Gulf. Brent crude futures settled 20 cents higher at $66.72 a barrel. WTI crude futures settled 1 cent higher at $60.21 a barrel.
Brent has gained 4% this week while WTI posted a 4.7% rise.
Tropical Storm Barry, which is expected to become a hurricane just before making landfall this weekend, boosted crude futures as oil companies in the Gulf of Mexico sliced production. Nearly 1.1 mb/d of crude oil production has been cut because of the storm.
The International Energy Agency (IEA) forecast surging U.S. oil output will outpace sluggish global demand and lead to a large inventory build around the world in the next nine months.
Iran is ready to hold talks with the United States if Washington lifts sanctions and returns to the 2015 nuclear deal it quit last year, Iranian President Hassan Rouhani said in a televised speech on Sunday.
US and Indian trade negotiators ended talks on Friday without making major progress on a range of disputes over tariffs and other protectionist measures imposed by both sides that are straining bilateral ties.
China’s economic growth slowed to 6.2% in the second quarter from a year earlier, in line with expectations, the weakest pace in at least 27 years, as demand at home and abroad faltered amid an escalating trade war with the US.
Asia oil refining margins have more than tripled in the past three weeks to hit their highest since September 2017, Refinitiv data showed on Friday, after refiners cut output and tightened fuel supplies. Refinery shutdowns in China also propped up the market as state oil majors cut back exports.
US energy firms this week reduced the number of oil rigs operating for a second week in a row as drillers follow through on plans to cut spending this year. Drillers cut four oil rigs in the week to July 12, bringing the total count down to 784, the lowest since February 2018, according to Baker Hughes.
Naphtha
No fresh news on the Naphtha market.
The July crack is lower at -$ 6.35 /bbl
The August crack is at -$ 5.75 /bbl
Gasoline
Asia’s gasoline crack rose for the third straight session on Friday to reach a three-month high of $8.75 a barrel, as buyers drew on inventories across key regions of Singapore, Europe and the United States. The current level is 60 cents below this year’s highest of $9.35 a barrel hit on April 12. –
Gasoline stocks in ARA eased by 28 KT to a five-week low of 1.10 million tonnes in the week to Thursday.
The July crack is higher at $ 8.95 / bbl
The August crack is at $ 7.85 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10ppm sulphur content were at a discount of 14 cents a barrel to Singapore quotes on Friday, compared with a discount of 18 cents per barrel a day earlier.
Asian refining profit margins slipped on Friday on the back of firmer crude prices, but posted their biggest weekly gain in four amid expectations for lesser export barrels coming out of China in the near-term.
The gasoil market in the region, however, would likely still remain under pressure due to weaker seasonal demand for the transportation fuel during the ongoing monsoon months, which typically lead to higher Indian exports.
Gasoil Stocks in ARA fell by 123 KT to 2.81 Million tonnes.
The July crack for 500 ppm Gasoil has eased to $ 14.65 /bbl with the 10 ppm crack at $ 15.35 / bbl. The regrade is at +$ 0.45 /bbl
The August crack for 500 ppm Gasoil is at $ 15.25 /bbl with the 10 ppm crack at $ 15.95 / bbl. The regrade is at +$ 0.05 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s fuel oil market eased on Friday but ended the week sharply higher after repeatedly hitting new record peaks amid shrinking supplies and firm demand.
The 380-cst front-month time spread, the prompt-month 180-cst crack to Dubai crude, as well as the 380-cst and 180-cst cash premiums all retreated from their respective record highs hit on Thursday.
Profit taking after sharp weekly gains may have contributed to the weaker HSFO derivative premiums on Friday.
Meanwhile, official storage data showed that ARA fuel oil inventories fuel oil inventories fell 172 KT to 1.07 million tonnes.
The July180 cst crack is sharply lower at $ 5.50 / bbl with the visco spread at $ 0.65 /bbl.
The August cst crack is at $ 1.55 / bbl with the visco spread at $ 0.80 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
The Fuel Oil cracks have eased off from their extremely strong levels last week. Nothing fresh to do today.
Hedge recommendations are essentially made for refiners. These are not trading positions as such. The rationale of these positions is to lock in extraordinary levels for the refiner.
Click Here to see how all our recommendations have fared
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.