Crude Oil
Oil prices fell more than 3% on Friday and posted their biggest weekly decline since June as fears of a slow economic recovery from the COVID-19 pandemic compounded worries about weak oil demand..
Brent crude fell $1.41 to settle at $42.66 a barrel, while WTI fell $1.60 to $39.77 per barrel.
Brent fell 5.3% from last week, while WTI lost 7.4%.
Saudi Aramco lowered its Oct’20 OSPs for crude supplies to Asia and the US, while raising some prices for grades bound for Northwest Europe and the Mediterranean, the company said in a pricing letter on 5 Sep’20.
US energy firms added 1 oil rig in the week to 4 Sep’20 to total 181 (-557 YoY), with analysts saying recent higher oil prices have encouraged some energy firms to start adding units, according to Baker Hughes.
Money managers raised their net long US crude futures and options positions by 541 contracts to total 334,983 in the week to 1 Sep’20, the US CFTC said on Friday.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 887,305 (+4,129 DoD) yesterday. The total number of active cases rose by 16,000 to 7,029,248. (Click here for details).
Naphtha
Asia’s naphtha crack rose for the fourth day on Friday to reach a near 5-1/2-week high of $80.88 a tonne supported by demand. Naphtha spot prices returned to premium levels for the first time on Thursday in about three to 3-1/2 weeks.
The October crack is higher at $ 1.45 / bbl
Gasoline
Asia’s gasoline margin was at a four-session high of $2.15 a barrel.
ARA onshore Gasoline inventories rose by about 32KT to reach 1.41 million tonnes in the week to September 3.
The October crack is higher at $ 3.25 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Refining margins for jet fuel were at a discount of $1.44 a barrel to Dubai crude during Asian trading hours, compared with minus $1.55 per barrel a day earlier. Cash discounts for jet fuel narrowed by 4 cents to $1.18 a barrel to Singapore quotes on Friday.
Cracks for the benchmark 10 ppm gasoil grade in Singapore dropped 17 cents to $3.46 a barrel over Dubai crude during Asian trading hours on Friday, the lowest since May 29.
ARA gasoil inventories dropped by 152 KT to 2.51 million tonnes in the week ended September 3.
The October crack for 500 ppm Gasoil is higher at $3.40 /bbl with the 10 ppm crack at $ 3.90 / bbl. The regrade is at -$ 4.30 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO crack hit an over two-month low on Friday amid ample supplies despite falling inventories and sluggish demand. The front-month VLSFO crack against Dubai crude fell to $5.99 a barrel, down from $6.33 a barrel in the previous session and $7.05 at the start of the week.
The October crack for 180 cst FO is higher at – $2.55 /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 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.