Crude Oil
Oil prices continued to stay mixed and directionless as the world tries to figure out its way forward.
Brent futures settled 35 cents higher at $55.88 a barrel. WTI futures, however, settled 14 cents lower at $52.20 per barrel.
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Oil fell in early Asian trading – after the first back-to-back weekly decline since October – amid fresh evidence that a resurgence of the coronavirus is taking a toll on economic growth and energy demand.
Losses have been kept in check by a disciplined response from producers. OPEC and its partners estimate they implemented 99% of their agreed oil-supply curbs in January. Having said that, OPEC oil output has risen for a 7th month in Jan’21 to 25.75 MB/D, up 160 KB/D from Dec’20, a Reuters survey found, after the group agreed to ease record supply curbs further, although an involuntary drop in Nigerian exports limited the increase.
OPEC oil output has risen for a 7th month in Jan’21 to 25.75 MB/D, up 160 KB/D from Dec’20, a Reuters survey found, after the group agreed to ease record supply curbs further, although an involuntary drop in Nigerian exports limited the increase.
US oil output rose 692 KB/D in Nov’20 to 11.124 MB/D, the first time it has surpassed 11 MB/D since Apr’20, according to a monthly report from the US EIA.
China’s factory activity grew at the slowest pace in five months in Jan’21, with the official manufacturing PMI falling to 51.3 from 51.9 in Dec’20, but still in line with the ongoing recovery in the world’s second-largest economy.
U.S. oil rigs rose six to 295 this week, their highest since May, while gas rigs were unchanged. The rig count was up for a sixth month in a row, gaining 33 in January, the biggest rise since October.
Money managers cut their net long US crude futures and options positions in the week to 26 Jan’21 by 9,821 to total 347,492 contracts, the US CFTC said on Friday.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,237,029 (+9,117 DoD) yesterday. The total number of active cases rose by around 30,000 DoD to 26.16 million. (Click here for details).
Naphtha
Asia’s naphtha crack slipped to $97.63 per tonne on Friday, down from $100.48 per tonne a day earlier.
The February crack is higher at $2.05 /bbl.
Gasoline
Asia’s gasoline crack slipped on Friday, but posted its biggest weekly gain in a month, thanks to tighter supplies and expectations that mass COVID-19 vaccinations would boost demand recovery in the coming months.
The gasoline crack was at $4.09 per barrel on Friday, down from a multi-month high of $4.37 per barrel touched in the previous session.
Gasoline stocks held independently in the ARA refining and storage hub dropped 6.2% to 1.2 million tonnes in the week to Jan. 28, data from Dutch consultancy Insights Global showed..
The February crack is lower at $4.65 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for jet fuel were at a discount of 21 cents per barrel to Singapore quotes on Friday, compared with a discount of 23 cents per barrel on Thursday.
Asian refining margins for jet fuel eased on Friday, but posted a weekly rise, as the aviation market awaits a gradual pick-up in flight schedules in coming months with COVID-19 vaccinations helping push travellers take back to the skies.
Gasoil stocks held independently in the ARA refining and storage hub dropped 3.4% to 2.6 million tonnes in the week to Jan. 28, data from Dutch consultancy Insights Global showed.
The February crack for 500 ppm Gasoil is higher at $5.30 /bbl with the 10 ppm crack at $ 6.15 / bbl. The regrade is at -$ 1.45 /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) front-month time spread climbed to a near one-year high on the last trading session of January, supported by tight fuel supplies and steady demand.
By contrast, cash differentials for 180-cst high-sulphur fuel oil (HSFO) cargoes sank to a two-week low of minus $1.43 per tonne to Singapore quotes, dragged by lower deal values in the Singapore window.
Fuel oil stocks in the ARA refining and storage extended gains for a third straight week to 1.454 million tonnes in the week ended Jan. 28, data from Dutch consultancy Insights Global (IG) showed. Compared with last year, the inventories at the ARA hub were 41% higher and well above the five-year seasonal average of 1.091 million tonnes.
The January crack for 180 cst FO is unchanged at -$2.70 /bbl with the visco spread at $0.80 /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.