Crude Oil
Oil futures gained more than 2% on Thursday, supported by a drop in U.S. unemployment.
Brent crude rose $ 1.11 to settle at $43.14 a barrel. U.S. crude rose 83 cents to settle at $40.65 a barrel.
U.S. non-farm payrolls increased by 4.8 million in June, beating expectations, even as permanent job losses rose.
US energy firms cut 3 oil rigs in the week to 2 Jul’20 to total 185 (-603 YoY), the 9th week in a row the US count fell to a fresh record low, according to Baker Hughes.
Chinese ports are struggling to unload record volumes of crude with storage tanks full after the country rushed to buy extra barrels during the oil price crash. More than 80 MB of crude oil are waiting to be discharged from tankers in Chinese ports.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 523,242 (+5,155 DoD) yesterday, with the total number of confirmed infections at 10,974,421 (+208,861 DoD). This is the largest daily growth recorded. (Click here for details).
New COVID-19 cases in the United States rose by nearly 50,000 on Wednesday, the biggest one-day increase since the start of the pandemic. Numerous states are advising citizens to restrict movements and closing businesses and restaurants again, which is expected to hamper job growth.
Naphtha
Asia’s naphtha crack hit a four-and-a-half month high of $85.85 a tonne as demand stayed firm.
The July crack is lower today at -$ 0.25 / bbl today. The August crack is at -$ 0.40 /bbl
Gasoline
Asia’s gasoline crack, however, fell to a three-session low of $1.48 a barrel premium to Brent crude as supplies remain aplenty.
Singapore’s onshore light distillates edged up by about 164 KB to reach a two-week high of 15.1 million barrels in the week to July 1, data from Enterprise Singapore showed..
The July crack is higher at $2.25 /bbl. The August crack is at $2.80 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash discounts for jet fuel widened on Thursday, weighed down by persistent weakness in aviation demand as a majority of international flights remain grounded.
Cash differentials for jet fuel were at a discount of 67 cents a barrel to Singapore quotes on Thursday, compared with a 64-cent discount a day earlier.
The aviation fuel market’s struggle is expected to be prolonged as long-haul flights continue to stay grounded, with countries aiming to prevent imported cases and passengers shying away from travelling to avoid quarantine periods.
Singapore onshore middle distillate stocks dropped 3.8% to 13.4 million barrels in the week ended July 1, Enterprise Singapore data showed. The weekly Singapore middle distillate inventories have averaged at 12.8 million barrels so far in 2020. This week’s stocks were 26.6 higher year-on-year.
The July crack for 500 ppm Gasoil is higher at $5.80 /bbl with the 10 ppm crack at $ 6.65 / bbl. The regrade is at -$ 5.15 /bbl.
The August crack for 500 ppm Gasoil is at $5.80 /bbl with the 10 ppm crack at $ 6.60 / bbl. The regrade is at -$ 3.80 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s cash differential for cargoes of 0.5% VLSFO flipped to a narrow premium on Thursday. The VLSFO cash differential jumped to a 65 cent per tonne premium to Singapore VLSFO quotes, up from a discount of $1.01 per tonne in the previous session and its highest since March 12.
This came as Singapore’s residual fuel oil inventories fell 1.473 million barrels (6%) to 25.123 million barrels in the week ended Wednesday, according to the Enterprise Singapore data. Residual fuel stocks were 28% higher from a year-earlier period.
The July crack for 180 cst FO is lower at – $4.50 /bbl with the visco spread at $1.10 /bbl.
The August crack for 180 cst FO is at – $3.40 /bbl with the visco spread at $0.80 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action 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.