Crude Oil
Crude prices recovered strongly on Friday with both benchmarks posting their first gain in four week..
The Brent futures contract expired $ 3.03 higher at $25.57 /bbl. The July contract eased 4 cents to settle at $ 26.44 / bbl. WTI rose 94 cents to settle at $19.78 /bbl.
After three consecutive weeks of losses, Brent crude notched a gain of about 23% while WTI increased about 17%.
U.S. energy firms cut oil rigs for a seventh week in a row, bringing the total count down to 325, the lowest since June 2016.
Russia raised oil and gas condensate output in April to 46.45 million MT, or 11.35 MB/D from 11.29 MB/D in Mar’20, Interfax reported on Saturday, before it makes cuts this month under a global supply pact.
South Korea’s factories were ravaged by the coronavirus outbreak in Apr’20, with the IHS Markit PMI skidding to 41.6, the lowest reading since Jan’09 as worldwide lockdowns sent activity tumbling and exporters battered by the worst slump in orders in 16 years.
US manufacturing activity plunged to an 11-year low in Apr’20, with the ISM manufacturing PMI falling to 41.5,as the novel coronavirus wreaked havoc on supply chains, suggesting the economy was sinking deeper into recession.
Hedge funds and money managers raised bullish wagers on US crude to the highest level since Sep’18, by 32,139 contracts to total 339,461 in the week through 28 Apr’20, the US CFTC said on Friday.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 248,146 (+3,481 DoD) yesterday, with the total number of confirmed infections at 3,563,689 (+82,260 DoD). (Click here for details).
Several countries and regions, including China’s central province of Hubei, where the novel coronavirus behind the pandemic was first detected, are relaxing lockdowns put in place to contain the virus.
Naphtha
Asia’s naphtha crack was at a 1-1/2 week low of $35.23 a tonne..
The May crack has dropped to -$2.45 / bbl.
Gasoline
Asia’s gasoline discount to Brent crude ended the week at $1.87 a barrel compared with a discount of $1.43 in the previous session as stronger crude weighed on the value. This, however, is a marked improvement when compared with April’s average of $7 a barrel discount to Brent as demand was gradually recovering in various degrees across some parts of the world.
Singapore’s onshore light distillates stocks, which comprise mostly gasoline and blending components for petrol, were down by 659 KB to 15.6 million barrels in the week to April 29, data from Enterprise Singapore showed.
The May crack has plunged to -$2.95 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10 ppm gasoil were at $1.85 per barrel to Singapore quotes on Thursday, compared with a discount of $1.91 per barrel a day earlier.
Cash discounts for jet fuel widened to $4.57 a barrel to Singapore quotes on Thursday, compared with $4.47 per barrel a day earlier.
Singapore onshore middle distillate stocks rose 3% to 14.9 million barrels in the week ended April 29, Enterprise Singapore data showed. Weekly middle distillate inventories have averaged at 12 million barrels so far in 2020, compared with 11.1 million barrels in 2019. Overall, onshore middle distillate inventories were 38.4% higher year-on-year.
The May crack for 500 ppm Gasoil is lower at $3.30 /bbl with the 10 ppm crack at $ 5.50 / bbl. The regrade is at -$ 8.30 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
380-cst HSFO discounts dropped to $12.63 a tonne on Thursday, its lowest since August 2006.
Singapore’s residual fuel oil inventories slipped by 125 kb to an 11-week low in the week ended April 29 to 22.204 million barrels, data from Enterprise Singapore showed. Residual fuel stocks were 6% lower than a year earlier.
The May crack for 180 cst FO is lower at -$3.50 /bbl with the visco spread at $0.90 /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.