Crude Oil
Oil prices settled more than 2% higher on Monday, buoyed by falling U.S. crude inventories and rising winter fuel demand due to one of the worst snowstorms to hit the U.S. Northeast in years.
Brent crude settled up $1.31 cents, or 2.4%, at $56.35 a barrel. U.S. crude gained $1.35 cents, or 2.6%, to settle at $53.55. Both benchmarks gained nearly 8% in January.
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The U.S. Northeast has been hit by a powerful winter snow storm, pummeling a vast swath stretching from Pennsylvania through New England and causing widespread disruption in New York City and other major urban centers in the region.
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.
The Iranian Foreign Minister suggested a way on Monday to overcome the US-Iranian impasse over who goes first in returning to the 2015 Iran nuclear deal, saying a top EU official could “synchronize” or “choreograph” the moves.
covid 19
No updates to this information overnight
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 recovered to $103.60 per tonne on Friday, up from $97.63 per tonne a day earlier as the fresh buying cycle for second half march delivery kicks off today.
The February crack is higher at $2.60 /bbl.
Gasoline
Gasoline cracks weakened as a recovery in Myanmar’s fuel imports in late 2020 could be snuffed out amid political uncertainty following a coup on Monday, trade sources said. Myanmar had been a bright spot for refined fuel in Southeast Asia since it ramped up imports in December and January to pre-COVID-19 levels, while renewed lockdowns in Indonesia and Malaysia have reduced demand, they said.
The gasoline crack was at $3.87 per barrel on Monday, slightly lower than Friday’s settle of $4.09 per barrel on Friday.
The February crack is higher at $5.15 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash differentials for 10 ppm gasoil rose on Monday to their strongest in more than a month, backed by firmer buying interests for physical cargoes and expectations for stronger industrial demand as COVID-19 restrictions ease gradually in coming months.
The differentials for gasoil with 10 ppm sulphur content were at a discount of 3 cents a barrel to Singapore quotes, the smallest discount since Dec. 28. They were at a discount of 9 cents per barrel on Friday.
The gasoil EFS traded at minus $6 per tonne on Monday – a level that typically makes it unworkable for arbitrage shipments.
Gasoil time spreads climbed into backwardation territory for the first time since late July.
The February crack for 500 ppm Gasoil is higher at $5.35 /bbl with the 10 ppm crack at $ 6.20 / bbl. The regrade is at -$ 1.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s prompt-month time spread for 0.5% very low-sulphur fuel oil (VLSFO) jumped to a near one-year high on Monday on signs of a tightening supply outlook and firm demand for the fuel despite easing regional utility demand.
The balance of Feb/March time spread climbed to $5.50 a tonne on Monday, up from $3.75 a tonne in the previous session and its highest since Feb. 12 last year, according to Refinitiv data in Eikon.
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 higher at -$2.60 /bbl with the visco spread at $0.65 /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.