Crude Oil
Brent crude fell below $20 a barrel and U.S. crude plunged 25% on Monday.
Brent futures settled $1.45 higher to settle at $19.99 /bbl. WTI fell $4.16 to settle at $12.78.
The fear of lack of available storage is driving oil prices lower.
Economic concerns continue to plague the market. Global economic output is expected to contract by 2% this year – worse than the financial crisis – while demand has collapsed by 30% because of the pandemic.
Russia will cut its May’20 oil output by 19% to 8.5 MB/D from its Feb-Mar’20 level of 10.4 MB/D, Interfax reported on Monday, citing Lukoil. Lukoil will have to reduce its oil output in Russia by 300 KB/D bpd in May’20, compared with Feb’20.
Oman will cut oil production from its six largest producing blocks by 23% from their Oct’18 baseline levels of 883 KB/D, equivalent to a cut of 201 KB/D, over May’20 and Jun’20 to adhere with the OPEC+ production cuts.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 211,447 (+4,532 DoD) yesterday, with the total number of confirmed infections at 3,062,469 (+69,199 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack extended losses to reach a three-session low of $50.23 a tonne after hitting a 5-1/2 week high on April 22.
The May crack has dropped to -$1.70 / bbl.
Gasoline
Asia’s gasoline crack rose to a 5-1/2-week high on Monday but ample supplies have yet to ease, keeping the crack value at a discount to Brent since mid-March. Asia’s gasoline crack was at a discount of $1.57 a barrel to Brent crude compared to a discount of $4.27 on Friday.
The May crack has improved to -$3.85 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for jet fuel widened to $4.50 a barrel to Singapore quotes on Monday, compared with $4.48 a barrel on Friday.
The May/June time spread for jet fuel in Singapore traded at a discount of $3.20 per barrel on Monday.
Cash differentials for 10 ppm gasoil were at a discount of $2.13 per barrel to Singapore quotes on Monday, compared with a discount of $2.34 a barrel on Friday.
The May crack for 500 ppm Gasoil has improved to $2.70 /bbl with the 10 ppm crack at $ 4.90 / bbl. The regrade is at -$ 5.45 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asian HSFO cash differentials firmed on Monday amid stronger buying interest for cargoes of the fuel. Cash discounts for 180-cst HSFO jumped $2.82 to minus $6.19 a tonne to Singapore quotes while 380-cst HSFO discounts were at $4.81 a tonne, up $2.10 from Friday.
This was in contrast to cash differentials for 0.5% VLSFO cargoes, whose discount narrowed slightly to $14.63 a tonne to Singapore quotes, up slightly from a record low of minus $15.24 a tonne on Friday.
Singapore’s Hin Leong Trading Pte Ltd, one of Asia’s top oil traders, has been placed under the management of a court-appointed supervisor as it seeks to restructure billions of dollars of debt, three sources with knowledge of the matter said on Monday.
The May crack for 180 cst FO has eased to -$3.00 /bbl with the visco spread at $0.95 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action for 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 refinery.
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.