Crude Oil
Oil prices continued to fall on Thursday in the absence of any countervailing data to support prices. Brent crude futures settled $ 1.25 lower at $ 58.23 /bbl. WTI crude futures settled 76 cents lower at $54.47/bbl.
China, on Thursday, vowed to counter the latest U.S. tariffs, but called on the United States to meet it halfway on a potential trade deal, as U.S. President Donald Trump said any pact would have to be on America’s terms. A trade war between to the world’s two largest economies has roiled global markets and fueled worries about a slowdown in oil demand growth.
China reported disappointing data for July, including a surprise drop in industrial output growth to a more than 17-year low. A slump in exports sent Germany’s economy into reverse in the second quarter.
Naphtha
Asia’s naphtha crack value was at a two-session low of $20.88 a tonne.
This was despite demand having emerged this week from Malaysia’s Titan and South Korea’s GS Caltex and Lotte Chemical.
Japan had imported 1.13 million tonnes of naphtha in July, up by about 25% compared to June and nearly 1.6% higher versus a year ago in line with higher ethylene output. Its ethylene production last month at 516,900 tonnes was the highest monthly total since March. Overall, Japan’s average monthly ethylene production for the first seven months of this year at nearly 523,000 tonnes was the higher versus the same period of 2018 but lower than 2017.
The August crack is higher at -$ 6.85 /bbl.
The September crack is at -5.90 / bbl.
Gasoline
Asia’s Gasoline crack rose to a near one-month high of $7.70 a barrel on Thursday, supported by a drawdown in stock levels.
Singapore’s onshore light distillates stocks fell to a three-week low of 9.8 million barrels in the week to Thursday.
A fire had broken out on Thursday at Pertamina’s Balikpapan refinery but the company said the refinery remained operational. It issued a tender to buy a total of 1.1 million barrels of 88-octane grade gasoline for September loading from either Singapore or Malaysia. The tender closes on Aug. 19, with offers to stay valid until Aug. 21 the tender might not be related to the fire as Pertamina occasionally buys cargoes from the spot market.
This was the highest number of trades concluded in a single session since Aug. 7. Gasoline stocks in Fujairah dropped marginally to 7.65 million barrels in the week ended August 13.
The August crack has risen to $ 7.70 / bbl.
The September crack is at $ 6.60 /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 29 cents a barrel to Singapore quotes on Thursday, compared with 22 cents on Wednesday.
Singapore’s onshore inventories for middle distillates surged to a five-week high in the week to Aug. 14.
Jet fuel cash differentials flipped into a discount of 7 cents a barrel to Singapore quotes on Thursday, the lowest differentials since June 27. They were at a premium of 3 cents a barrel on Wednesday.
The jet fuel market is likely to weaken further over the next few weeks as aviation demand tapers off towards the end of summer travelling season, while regional refiners are expected to boost production and increase supplies.
The August crack for 500 ppm Gasoil is lower at $ 16.15 /bbl with the 10 ppm crack at $ 17.05 / bbl. The regrade is flat – $ 0.00 /bbl.
The September crack for 500 ppm Gasoil is at $ 16.85/bbl with the 10 ppm crack at $ 17.55 / bbl. The regrade is at – $ 0.15 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash premiums of Asia’s mainstay 380-cst high sulphur fuel oil rose on Thursday, lifted by firmer deal values in the Singapore trading window.
The cash premiums snapped six straight sessions of declines and lifted the differential away from a near five-week low in the previous session. The 380-cst cash premiums were at $11.86 a tonne to Singapore quotes, up from $10.52 a tonne in the previous session.
Onshore fuel oil stocks fell by 2.176 million barrels from the previous week to 19.741 million barrels. Compared with year-ago levels, this week’s onshore fuel oil inventories were 29% higher.
The August 180 cst crack has recovered to – 8.45 / bbl with the visco spread at $ 1.55 /bbl.
The September 180 cst crack is at – 8.95 / bbl with the visco spread at $ 1.95 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh recommendations for today. If 4Q19 10 ppm gasoil cracks breach $ 19 / bbl, we will consider instituting a hedge.
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.