Crude Oil
Oil prices fell on Monday as concerns about weakening fuel demand and the prospect of higher OPEC+ output outweighed optimism over a U.S. stimulus package.
Brent crude settled at $50.86 a barrel, falling 43 cents after trading as high as $52.02 earlier in the session. WTI futures fell 61 cents to $ 47.62 per barrel.
A Jan. 4 meeting of the OPEC+ group also looms over the market. The group is tapering record oil output cuts made this year to support the market. OPEC+ is set to boost output by 500 kbpd in January and Russia supports another increase of the same amount in February.
Money managers raised their net long US crude futures and options positions by 4,455 contracts to total 325,787 in the week to 21 Dec’20, the US CFTC said on Monday.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,780,965 (+9,105 DoD) yesterday. The total number of active cases rose by around 40,000 DoD to 22.12 million. (Click here for details).
Naphtha
Asia’s naphtha crack rose to its strongest level in more than two months on Monday, buoyed by limited supplies and steady petrochemical demand.
The January crack is unchanged at $1.15 /bbl.
Gasoline
Asia’s gasoline crack slipped, weighed down by concerns that renewed mobility restrictions to contain the spread of a highly-infectious coronavirus variant would hurt demand for the transportation fuel.
Japan aims to eliminate gasoline-powered vehicles in the next 15 years, in a plan to reach net zero carbon emissions and generate nearly $2 trillion a year in green growth by 2050.
The January crack is unchanged at $3.75 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian refining margins for jet fuel inched higher on Monday, but reimposed travel restrictions in several countries to slow the spread of a highly-infectious coronavirus variant is expected to dent passenger demand recovery.
Philippines, on Saturday, extended a ban on flights from the United Kingdom by another two weeks to mid-January in a bid to prevent the spread of the new coronavirus variant, while Japan said it would temporarily ban non-resident foreign nationals from entering the country.
Cash differentials for jet fuel were at a discount of 10 cents per barrel to Singapore quotes on Monday, compared with a discount of 11 cents a barrel in the last trading session on Thursday.
The January crack for 500 ppm Gasoil is unchanged at $5.60 /bbl with the 10 ppm crack at $ 6.40 / bbl. The regrade is at -$ 0.85 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO time-spread and refining margin firmed on Monday.
The VLSFO Jan/Feb time-spread climbed to a near one-month high of 50 cents a tonne on Monday while the January crack value against Dubai crude rose to a near 1-1/2 month high of $10.89 a barrel.
China’s exports of clean marine fuel in November rose from October, data from the General Administration of Customs showed. VLSFO exports were 1.26 million tonnes, up from 1.22 million tonnes in October, which compares with the year-high of 1.62 million tonnes in August.
The January crack for 180 cst FO is unchanged at -$2.40 /bbl with the visco spread at $0.70 /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.