Crude Oil
Oil prices gained nearly 3% on Monday, rebounding from several day of losses built on concerns of rising coronavirus cases, one day before the end of U.S. presidential election voting.
Brents future gained $1.03 19 cents to settle at $38.97 a barrel. WTI crude futures rose $1.02 to $36.81 per barrel.
Both contracts fell more than $2 earlier in the session, but rebounded with strong factory data in Asia and the United States.
US manufacturing activity accelerated more than expected in Oct’20, with the ISM national factory index increasing to 59.3 for Oct’20, as new orders jumped to their highest level in nearly 17 years.
An estimated 518 KB/D of crude production and 431.48 MMcf/d of natural gas production was still shut-in on 2 Nov’20 after Hurricane Zeta, reflecting 28% and 15.9% of US Gulf output, respectively, according to the US BSEE.
India’s IOC ran its refineries at a 90% rate in Oct’20 riding on improved demand for fuels except for jet fuel, with IOC’s processing demand for gasoline and diesel reaching pre-coronavirus levels by the end of Oct’20.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,211,011 (+5,706 DoD) yesterday. The total number of active cases rose by around 230,000 yesterday to 12.08 million. (Click here for details).
Naphtha
Asia’s naphtha crack also fell by $1.08 a tonne to a two-session low of $68.70 a tonne. The naphtha crack was pressured by demand concerns from widening lockdown measures.
The November crack is steady at $ 2.40 /bbl
Gasoline
Asia’s gasoline crack fell on Monday, dropping from a three-week high of more than $3 a barrel in the previous session, on renewed concerns that tougher coronavirus lockdowns in Europe would weaken fuel demand. The gasoline crack fell to a two-session low of $2.26 a barrel on Monday, down from $3.37 a barrel on Friday.
The November crack is higher at $ 3.05 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian refining margins for 10 ppm gasoil dropped on Monday, despite weaker raw material crude prices. Refining margins or cracks for 10 ppm gasoil plunged to $2.98 a barrel over Dubai crude during Asian trading hours, down from $3.64 per barrel on Friday.
The Nov/Dec time spread for the benchmark 10 ppm gasoil in Singapore remained in a contango structure to trade at a discount of 48 cents a barrel on Monday.
The gasoil EFS traded around $3 per tonne on Monday.
The November crack for 500 ppm Gasoil is higher at $2.95 /bbl with the 10 ppm crack at $ 3.75 / bbl. The regrade is at -$ 0.80 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash premiums for cargoes of Asia’s 180-cst HSFO slid on Monday, falling by more than 60% after cargoes of the fuel were offered at sharply lower premiums, while cash premiums for 380-cst HSFO cargoes edged higher.
The 180-cst HSFO cash premiums were at a near three-week low of $2.95 a tonne to Singapore quotes, down from $8.03 a tonne on Friday. Cargoes of 180-cst HSFO were offered in the Singapore window at $3 per tonne to Singapore quotes on Monday. By comparison, they were last offered at premiums of about $8 per tonne in the previous week and last traded at $7 per tonne above Singapore quotes on Oct. 26.
Meanwhile, the front-month viscosity spread was little changed, edging up 25 cents to $6 per tonne.
The November crack for 180 cst FO is higher at $0.90 /bbl with the visco spread at $1.15 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
We will add a hedge for December and January Japan Naphtha – Dubai at current levels of $2.25 and $2.05 respectively. We will also add a hedge for December 180 cSt-Dubai at +$.20 / bbl
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.