Crude Oil
Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September.
Brent futures rose 87 cents to settle at $43.32 per barrel. WTI futures rose 84 cents to settle at $41.04 per barrel.
OPEC+ compliance with a pact to cut oil supply in Sep’20 was seen at 102%, two OPEC+ sources told Reuters. OPEC conformity with the oil output reduction in Sep’20 was 105%, while non-OPEC compliance was 97%.
Global refinery runs are expected to rebound “only partially” in 2021 to average 79.4 MB/D after the devastation caused by the coronavirus pandemic this year and will be at levels “last seen in 2015,” the IEA said Wednesday.
api data
The API data showed draws across the board in a report that was definitely supportive for crude prices. We await official data today.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,096,323 (+6,083 DoD) yesterday. The total number of active cases rose by around 96,000 DoD to 8.51 million. (Click here for details).
Naphtha
Asia’s naphtha crack was almost at a two-week low on ample supplies.
East-bound naphtha from Europe, the United States and the Mediterranean arriving this month are expected at up to 1.8 million tonnes, up 17% versus the previous month. East-bound cargoes arriving next month are also expected to be at similar levels for now although there is still time to revise some of the provisional bookings. The weaker fundamentals were reflected in naphtha spot prices this week.
The November crack is higher at $ 2.55 /bbl
Gasoline
Asia’s gasoline refining margin fell for a seventh straight session to hit a near 1-1/2 month low of $2.20 a barrel on Wednesday.
The November crack is lower at $ 3.20 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian refining margins for jet fuel dipped on Wednesday as coronavirus-led travel restrictions continued to impede aviation demand with thousands of flights still grounded across the region.
Despite weaker raw material crude prices, refining profit margins, or cracks, for jet fuel in Singapore slipped to $1.52 per barrel over Dubai crude during Asian trading hours. They were at $1.55 per barrel a day earlier. The cracks found some support earlier this month as demand for closely-related heating oil kerosene picked up ahead of North Asia’s winter.
Cash discounts for jet fuel were at 52 cents a barrel to Singapore quotes on Wednesday, compared with a 48-cent discount on Tuesday.
The November crack for 500 ppm Gasoil is lower at $2.80 /bbl with the 10 ppm crack at $ 3.60 / bbl. The regrade is at -$ 1.90 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 180-cst HSFO cash differential jumped to an eight-month high of $5.31 per tonne to Singapore quotes on Wednesday amid sharply higher deal values in the Singapore trading window.
Two 180-cst HSFO cargoes traded at premiums of $5 and $6 per tonne on Wednesday, compared with a premium of $2 per tonne paid for a similar cargo last week when the fuel last traded.
Firmer cargo deals also lifted cash premiums for 0.5% VLSFO to a 7-1/2-month high of $1.98 per tonne to Singapore quotes.
The November crack for 180 cst FO is higher at – $0.65/bbl with the visco spread at $1.25 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
We will add a tranche of November FO 180 cSt – Dubai crack at -$0.65 as a hedge.
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.