Crude Oil
Oil prices settled higher on Monday after the U.S. said China is in compliance with the first phase of the two nations’ trade deal.
Brent crude rose 41 cents to settle at $45.37 a barrel, while WTI rose 88 cents to $42.89 per barrel.
US oil output from seven major shale formations is expected to fall 20 KB/D bpd in Sep’20 to about 7.56 MB/D, according to a monthly EIA report.
The JMMC of the OPEC+ said that members that exceeded their output quotas must implement so-called compensation cuts through Sep’20 to make up for their overproduction.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 777,228 (+4,297 DoD) yesterday, with the total number of active cases falling by 10,050 to 6,481,618. We will track this number going forward for a better sense of the big picture. (Click here for details).
Naphtha
Asia’s naphtha crack was unchanged at $60.88 a tonne, or trading at a discount of slightly over 70 cents a barrel to Brent crude, due to ample supplies and slower demand caused by major cracker maintenance in Taiwan.
Japan imported 1.3 million tonnes of naphtha in July, up from 1.2 million tonnes in June, the Ministry of Economy, Trade and Industry said. Japan’s ethylene production was at 500,900 tonnes in July, compared with 418,500 tonnes in June.
The September crack has eased to $0.80 /bbl.
Gasoline
Asia’s gasoline crack rose to a near 5-1/2 week high of $2.35 a barrel on Monday, tracking gains in the Nymex gasoline futures in the United States.
The September crack is lower at $3.65 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash discounts for 10 ppm gasoil widened on Monday, weighed down by sluggish buying interests for physical cargoes.
Cash differentials for 10 ppm gasoil were at a discount of 41 cents a barrel to Singapore quotes on Monday, a level not seen since May 29. They were at a discount of 30 cents per barrel on Friday.
Cracks for the benchmark gasoil grade in Singapore have averaged $5.98 per barrel so far this month. This compares with the July average of $6.76 per barrel.
Global flying capacity edged 0.2%, or 67,000 seats, lower to 58.2 million seats in the week commencing 17 Aug’20, according to aviation information provider OAG.
The September crack for 500 ppm Gasoil is lower at $4.90 /bbl with the 10 ppm crack at $ 5.70 / bbl. The regrade is at -$ 4.80 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month crack for 0.5% VLSFO slipped on Monday, partly hurt by firmer crude prices. The front-month VLSFO crack dipped to $8.33 per barrel against Dubai crude during Asian trade, down from $8.39 per barrel on Friday. The VLSFO cracks, however, have gained 11% in the last two weeks.
The cash discount for Asia’s 0.5% VLSFO was at $1.75 a tonne to Singapore quotes, compared with a discount of $1.72 per tonne on Friday.
The 380-cst HSFO barge crack for September was at a discount of $6.47 a barrel to Brent, compared with minus $6.60 a barrel on Friday.
The September crack for 180 cst FO is higher at – $1.70 /bbl with the visco spread at $0.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh activity 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.