Crude Oil
Oil eased on Thursday as the market focused more on concerns that delays to vaccine rollouts and fresh travel curbs could depress demand.
Brent futures settled 28 cents lower at $55.53 a barrel. WTIs future settled 51 cents lower at $52.34 per barrel.
| l |
Premium of the Brent front-month over the second month rose to its highest level since February 2020 for a fourth day in a row, with some attributing the strength to upcoming Saudi Arabia’s pledge to voluntarily cut output by 1 mil bpd in February and March as part of OPEC+ deal.
A plunge in the volume of crude oil stored on ships combined with unexpected cuts from top producer Saudi Arabia have created a glut of vessels available for hire, pressuring the outlook for supertankers this year.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,199,120 (+16,175 DoD) yesterday. The total number of active cases rose by around 40,000 DoD to 25.96 million DoD. (Click here for details).
Naphtha
Asia’s naphtha crack climbed on Thursday, supported by steady petrochemicals demand, but fresh supplies available in the region capped further gains.
The naphtha crack rose to $100.48 per tonne on Thursday, up from $97 per tonne in the previous session.
The February crack is lower at $1.95 /bbl.
Gasoline
Asia’s gasoline crack rose 30 cents to $4.37 per barrel on Thursday, its strongest level since Oct. 7, buoyed by firmer buying interests for physical cargoes.
Singapore’s light distillate inventories dropped 9.9% to 13.96 million barrels in the week to Jan. 27, according to Enterprise Singapore data. Weekly Singapore light distillate inventories have averaged 14.7 million barrels so far this year, compared with an average of 14.2 million barrels in 2020.
The February crack is higher at $5.35 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for gasoil with 10 ppm sulphur content narrowed 24 cents a barrel to Singapore quotes, compared with a discount of 28 cents per barrel a day earlier.
The front-month time spread for the benchmark gasoil grade in Singapore traded at a discount of 11 cents per barrel on Thursday. The spread has narrowed its contango by 80% over the last three months, trimming the earlier incentive for traders to store the product.
Singapore’s middle distillate inventories dropped 7.2% to 14.1 million barrels in the week to Jan. 27, according to Enterprise Singapore data. Weekly Singapore middle distillate inventories have averaged 14.6 million barrels so far this year, compared with an average of 13.9 million barrels in 2020. This week’s stocks were 25.5% higher than a year ago.
The February crack for 500 ppm Gasoil is marginally higher at $5.05 /bbl with the 10 ppm crack at $ 5.90 / bbl. The regrade is at -$ 1.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% very low-sulphur fuel oil (VLSFO) refining margin extended gains on Thursday, nearing a multi-month high reached last week amid steady crude oil prices and lower Singapore fuel oil inventories.
The front-month VLSFO crack versus Dubai climbed to $12.98 a barrel, up from $12.73 a tonne in the previous session and near to a 10-month high of $13.11 a tonne on Wednesday in the week before, according to Refinitiv data.
The front-month VLSFO crack versus Dubai climbed to $12.98 a barrel, up from $12.73 a tonne in the previous session and near to a 10-month high of $13.11 a tonne on Wednesday in the week before, according to Refinitiv data.
Onshore fuel oil stocks fell by 1.208 million barrels, or about 190,000 tonnes, to 20.791 million barrels, or 3.274 million tonnes, Enterprise Singapore data showed.Residual fuel stocks were down 12% from a year earlier for the widest year-on-year deficit since March 2019.
The January crack for 180 cst FO is unchanged at -$2.80 /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 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.