Crude Oil
Brent oil fell while U.S. crude futures steadied on Thursday as U.S.-China trade tensions persisted. Brent crude futures ended the session 36 cents to settle at $66.03 a barrel. The more active May Brent contract fell 27 cents to settle at $66.31 a barrel. U.S. crude rose 28 cents to settle at $57.22 a barrel.
For February, U.S. crude gained 6.4 percent while Brent crude rose 6.6 percent.
Both Chinese and Indian economies showed signs of slowing adding to the bearish sentiment in the market. This was in addition to the surge in US production.
Factory activity in China, the world’s biggest oil importer, shrank for a third month in February as export orders fell at the fastest pace since the financial crisis a decade ago. India’s economy lost momentum in the final quarter of 2018, reducing the annual rate of growth to 6.6 percent, the slowest pace in five quarters and much less than expected.
U.S. President Donald Trump on Thursday warned he could walk away from a trade deal with China if it were not good enough, even as his economic advisers touted “fantastic” progress towards an agreement to end a dispute with the Asian country.
Russian Energy Minister Alexander Novak and his Saudi counterpart Khalid al-Falih discussed in a phone call bilateral cooperation in the energy sphere, Russia’s energy ministry said in a statement on Thursday, without elaborating.
The U.S. Energy Department said on Thursday it is offering up to 6 million barrels of sweet crude oil from the national emergency reserve in a sale mandated by previous laws to raise funds to modernize the facility.
Naphtha
Asia’s naphtha crack rose for a third straight session to hit a two-month high of $54.15 a tonne on Thursday, supported by demand.
South Korea’s LG Chem bought the fuel for first-half April delivery at premiums around $5 a tonne to Japan quotes on a cost-and-freight (C&F) basis. This was similar to the price level Lotte Chem paid on Wednesday for naphtha also scheduled for first-half April delivery. Other buyers seen this week included Hanwha Total and Unipec.
The March crack is lower at -$ 6.10 /bbl
Gasoline
Asia’s gasoline crack stayed at $1.52 a barrel, unchanged from Wednesday after it hit a 1-1/2 month high.
Demand for the fuel saw a slight drawdown on gasoline inventories in Singapore. Singapore’s onshore light distillates stocks eased 2.36 percent from a record high to a two-week low of about 16.9 million barrels in the week to Feb. 27.
The data showed that Indonesia, Asia’s top gasoline importer, has imported a total of nearly 1.69 million tonnes of gasoline for the first two months of this year compared to about 1.59 million tonnes. Indonesia, however, also imports gasoline from other suppliers outside Singapore such as China. Indonesian demand for gasoline has been seen stronger for the month of March, possibly driven by several factors including lower fuel prices and coming elections.
The March crack is higher at $ 1.85 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10ppm gasoil were at a discount of 13 cents a barrel to Singapore quotes, compared with a discount of 16 cents a barrel on Wednesday.
Cash differentials for Jet fuel were at a discount of 25 cents a barrel to Singapore quotes, compared with Wednesday’s discount of 22 cents a barrel.
Singapore’s onshore inventories for middle distillate rose by 31,000 barrels in the week to Feb. 27 to 12.24 million barrels, their highest levels in five weeks.
The March/April time spread, which is currently in a contango structure, narrowed by 5 cents on Thursday to a discount of 18 cents a barrel.
The March crack is marginally higher at $ 15.50 /bbl with the 10 ppm crack at $16.45 /bbl. The regrade has improved to – $ 0.80 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
An improving sentiment among industry participants continued to characterize Asia’s fuel oil market with cracks, front-month timespread and cash premiums all extending weekly gains after posting sharp losses in the previous week.
The 380-cst cash premiums and the front-month time spread were each at a one-week high. The March 380-cst barge crack discount against Brent crude was also at its narrowest in seven sessions at minus $3.86 a barrel, compared with minus $3.95 a barrel on Wednesday.
Singapore Fuel Oil inventories rose to 21.66 million barrels, an increase of 1.1 million barrels in the week ended Feb. 27. The rise lifted by higher net import volumes, official data released on Thursday showed.
The March180 cst crack has improved to $ 1.35 / bbl with the visco spread at $ 0.95 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to report today.
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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.