Crude Oil
Oil futures edged up on Tuesday after falling for five days, gaining support from a rebound in Wall Street stocks. Brent crude futures rose 19 cents to settle at $59.51 a barrel. WTI crude futures 34 cents to settle at $53.48 a barrel.
Prices may have also benefited from talk that OPEC and its allies might tighten the market. OPEC wants to extend current oil output cuts until at least Jun’20 from Mar’20, with the possibility of deeper reductions on the table if oil demand in China is significantly impacted by the spread of a new coronavirus, OPEC sources said.
U.S. stocks rose as gains in technology and financial shares helped major indexes recover from their biggest selloff in about four months. The U.S. dollar rose to its highest since early December against a basket of currencies.
China’s National Health Commission said on Wednesday the death toll from the coronavirus outbreak in the country had risen to 132 as of end-Tuesday, with another 1,459 new cases confirmed, to total 5,974 as of end-Tuesday. Most of the WHO’s criteria for declaring a global emergency have been met, but it is awaiting clear evidence of a sustained spread of the new coronavirus outside China before doing so, some experts and diplomats said.
api data
The API data is a bit of a mixed bag with a bullish bias. Crude stocks have fallen amid expectations of a build. We expect a bigger distillate draw than that reported by the API in today’s DOE report.
Naphtha
Asia’s naphtha crack eased 2.5% to a three-week low of $76.80 a tonne on muted demand.
In the Philippines, JG Summit Olefins has further delayed the restart of its 320,000 tonnes per year (tpy) cracker to first-half of February. The cracker restart date has previously been delayed from December to the third week of January following maintenance and expansion works which will raise the capacity to 480,000 tpy.
The February crack has jumped up to – $ 2.95 / bbl.
Gasoline
Asia’s gasoline crack slumped 37% to a 7-month low of $2.94 /bbl.
It was unclear if China would be shipping more gasoline out of the country as demand has likely fallen.
Arrivals of European gasoline and gasoline components to the U.S. have remained low at about 434,200 tonnes so far in January, versus European exports at about 990,900 tonnes in December.
The February crack is higher at 5.15/ bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10 ppm gasoil in Singapore climbed to 23 cents a barrel to Singapore quotes on Tuesday, up from 21 cents per barrel on Friday.
Cash premiums for jet fuel fell to 36 cents per barrel over Singapore quotes on Tuesday, compared with a premium of 40 cents per barrel in the last trading session on Friday.
The February/March time spread for jet fuel in Singapore traded at a premium of 26 cents per barrel, down from 38 cents a barrel on Friday.
Asian jet fuel demand is taking a beating from an outbreak of a flu-like virus in China that has led airlines to cancel scores of flights during the peak Lunar New Year travel season.
The February crack for 500 ppm Gasoil has rebounded to $11.15 /bbl with the 10 ppm crack at $ 11.90 / bbl. The regrade is at -$ 0.25 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO front-month crack edged higher on Tuesday after falling for 10 straight sessions even as crude oil prices remained low. The front-month VLSFO crack rose to $21.45 per barrel above Brent crude, compared with $21.11 a barrel on Monday.
The February 180 cst crack has improved to -$ 10.95 / bbl with the visco spread at $ 1.05 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action for today. Jet consumers may however examine the possibility of putting in place hedges either off crude or off the flat price in jet.
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.