Crude Oil
Brent rose more than 1% on Thursday to its highest since March, supported by lower U.S. crude inventories, OPEC-led supply cuts and recovering demand.
Brent crude rose 34 cents to settle at $36.09 /bbl. WTI settled 43 cents higher at $33.92 /bbl.
Data from the U.S. Labor Department on Thursday revealed another 2.4 million Americans filed for unemployment last week.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 334,173 (+4,934 DoD) yesterday, with the total number of confirmed infections at 5,190,476 (+107,085 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack in the meantime extended gains to hit a three-and-a-half-week high of $36.38 a tonne.
The June crack is higher at -$2.50 / bbl.
Gasoline
Asia’s gasoline crack plunged more than 433% to a discount of 40 cents to Brent, compared to a premium of 12 cents on Wednesday. It turned to premiums for the first time in nearly two months on Tuesday. Unlike naphtha where demand from the petrochemical sector has been persistently firm in Asia, gasoline is starting to recover but on a slow and gradual pace as countries around the world ease lockdown measures. Gasoline stored on vessels are still anchored off Singapore/Malaysia.
Data from Enterprise Singapore showed that light distillates stocks eased 157 Kb to a two-week low of 15.2 million barrels in the week to May 20. But the current level was 32% higher compared to a year ago when stockpiles were at 11.5 million barrels.
The June crack is lower at $0.25 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10 ppm gasoil were at 77 cents per barrel to Singapore quotes on Thursday, the smallest discounts since end-March. They were at a discount of 84 cents per barrel on Wednesday.
Cash discounts for jet fuel widened by 6 cents to $2.61 a barrel to Singapore quotes on Thursday as the front-month spread widened its contango structure.
Singapore onshore middle distillate stocks slipped 0.2% to 14.1 million barrels in the week ended May 20, Enterprise Singapore data showed. Weekly middle distillate inventories have averaged at 12.3 million barrels so far in 2020, compared with 11.1 million barrels in 2019. Overall, onshore middle distillate inventories were 19.5% higher year-on-year.
The June crack for 500 ppm Gasoil has dropped to $2.85 /bbl with the 10 ppm crack at $ 4.65 / bbl. The regrade is at -$ 1.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash discounts for 0.5% VLSFO Asian cargoes widened on Thursday amid an absence of buying interest and ample supplies as reflected by swelling Singapore inventories. Cash discounts were at their widest in nearly three weeks at minus $8.60 a tonne against Singapore quotes.
Singapore’s residual fuel oil inventories climbed for a third week, rising 5% to a more than one-year high in the week ended May 20 on higher net import volumes. Onshore fuel oil stocks rose by 1.185 million barrels from the previous week to 26.172 million barrels, their highest since the week to May 8 last year, data from Enterprise Singapore showed.
The June crack for 180 cst FO is lower at – $2.60 /bbl with the visco spread at $1.25 /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.