Crude Oil
Oil was up on Monday as more countries announced they would begin easing coronavirus lockdowns.
Brent crude settled at $27.20 a barrel, up 76 cents. WTI rose 61 cents to settle at $20.39 /bbl.
Finland and several U.S. states were among numerous governments moving to ease lockdown restrictions on Monday to resurrect their economies.
However, the re-emergence of trade tensions between the United States and China limited the rise in prices. Adding to U.S. President Donald Trump’s threat last week to impose tariffs on China, Secretary of State Mike Pompeo said on Sunday there was “a significant amount of evidence” that the new coronavirus emerged from a Chinese laboratory.
Indian refiners have stored about 32 million MT of oil in tanks, pipelines and on ships, taking advantage of low oil prices to help the nation cut its import bill, the Indian oil minister said on Monday.
Freight rates last week declined at a rapid pace in both dirty and clean tanker markets, reversing two consecutive weeks of gains, amid a lack of cargoes and demand destruction. The outlook for this week remains bearish, with charterers looking to profit from the lower rates.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 252,241 (+4,4096 DoD) yesterday, with the total number of confirmed infections at 3,643,271 (+79,582 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack plunged 68% on Monday to reach a two-week low of $11.13 a tonne as high volumes of western cargoes weighed while demand could slow this week due to holidays in key importing countries of China, South Korea and Japan.
India exported 820,000 tonnes of naphtha for March shipment, highest since December shipments at 970 KT. Cargoes arriving from the West, including Europe, the Mediterranean and the United States this month in Asia are expected to surge to 2.7 million tonnes, highest since 2008.
The May crack has improved to -$1.15 / bbl.
Gasoline
Asia’s gasoline crack also dived to a two-week low, with its discounts to Brent widening to $4.75 a barrel versus a discount of $1.87 in the previous session.
Gasoline stocks at ARA, at 1.2 million tonnes in the week to Thursday were at their highest since March 5.
The May crack has recovered to -$0.95 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10 ppm gasoil were at $1.58 per barrel to Singapore quotes on Monday, compared with a discount of $1.85 per barrel on Thursday.
India, which has now extended its nationwide lockdown for another two weeks after May 4, is pushing more barrels into the wider Asian market which is already grappling with supplies. India’s April gasoil exports closed at a four-month high of 2.73 million mt, compared to 2.53 million mt in March.
The Gasoil EFS traded at minus $1.57 a tonne on Monday, a very high level. This strength has led Indian cargoes to swing East, with 1.12 million mt, the highest proportion since May 2018.
Cash discounts for jet fuel widened to $4.65 a barrel to Singapore quotes on Monday, compared with $4.57 per barrel on Thursday. Refining margins for jet fuel were at $3.16 a barrel below Dubai crude on Monday, compared with minus $3.19 on Thursday.
The May crack for 500 ppm Gasoil is lower at $3.25 /bbl with the 10 ppm crack at $ 5.45 / bbl. The regrade is at -$ 9.05 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash discounts for cargoes of Asia’s 380-cst HSFO fell to a 14-year low of $14.08 a tonne on Monday while discounts for 180-cst HSFO cargoes were at minus $14.02 a tonne. Discounts for both HSFO grades were at their lowest since August 2006.
By contrast, discounts for 0.5% VLSFO cargoes recovered slightly, narrowing to minus $12.54 a tonne from minus $14.50 a tonne in the previous session.
The May crack for 180 cst FO is higher at -$2.40 /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.