Crude Oil
Oil prices fell on Friday and posted a second consecutive monthly drop as rising COVID-19 cases in Europe and the United States heightened concerns over the outlook for fuel consumption.
The expiring Brent future fell by 19 cents to settle at $37.46 a barrel. The more active January contract lost 32 cents to settle at $37.79 a barrel. WTI crude futures fell 38 cents to $35.79 per barrel.
WTI fell 11% for the month, while Brent dropped 10%.
India’s gasoil consumption in Oct’20 rose 6.6% YoY to 6.17 MMT, the first such increase since COVID-19 restrictions were imposed in late Mar’20, while gasoline sales rose 4% YoY to 2.4MMT, preliminary data showed on Sunday.
China’s factory activity expanded at a slightly slower pace in Oct’20 but beat analysts’ expectations, with the official manufacturing PMI falling to 51.4 in Oct’20 from 51.5 in Sep’20, suggesting a continuing economic recovery.
US energy firms added 10 oil rigs in the week to 30 Oct’20 to total 221 (-470 YoY), according to Baker Hughes, with drillers adding the most rigs in a month since May’18 as some returned to the well pad after crude prices steadied.
Money managers cut their net long U.S. crude futures and options positions in the week to Oct. 27 by 36,589 contracts to 287,723, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,205,044 (around 19,000 over the weekend) yesterday. The total number of active cases rose by around 710,000 over the weekend to 11.85 million. (Click here for details).
Naphtha
No fresh news on the naphtha markets.
The November crack is higher at $ 2.40 /bbl
Gasoline
Asia’s gasoline crack ended the month at a three-week high of over $3 a barrel on Friday, as inventories across key regions fell despite renewed lockdowns in Europe.
Gasoline inventories in ARA fell nearly 8% to reach a six-and-a-half-month low of about 1.17 million tonnes.
The November crack is higher at $ 2.90 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for gasoil with 10 ppm sulphur content narrowed to 49 cents a barrel to Singapore quotes, compared with a 53-cent discount a day earlier.
Run cuts at some refineries as well as steady domestic demand in China and India have helped tighten the market to an extent.
China’s gasoil exports in October are likely to close at around 1.5 million tonnes, compared with 1.19 million tonnes in September.
The front-month time spread for the benchmark 10ppm gasoil in Singapore , which has stayed in a contango structure since late-July, traded at a discount of 49 cents a barrel on Friday.
Gasoil stocks held in ARA dropped 5.9% to 2.6 million tonnes in the week to Oct. 29. The data showed ARA jet fuel inventories jumped 7.4% to a record 1.2 million tonnes. Compared with a year earlier, ARA gasoil inventories were down 1.1%, while jet fuel stocks were about 61% higher.
The November crack for 500 ppm Gasoil is higher at $2.60 /bbl with the 10 ppm crack at $ 3.40 / 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 crack rose to a two-week high on Friday, while cash premiums for the marine fuel climbed on firmer buying interests for physical cargoes.
The front-month VLSFO crack was at $9.20 per barrel against Dubai crude during Asian trading hours, the strongest since Oct. 16. It was at $8.87 per barrel on Thursday.
Cash premium for Asia’s 0.5% VLSFO rose to $1.75 a tonne to Singapore quotes on Friday, compared with $1.38 per tonne a day earlier.
The front-month time spread widened its backwardation on Friday to trade at a premium of $1 per tonne on Friday, up from 25 cents per tonne a day earlier.
The 380-cst HSFO barge crack for November was at a discount of $3.39 a barrel to Brent on Friday, compared with minus $3.13 a barrel on Thursday.
Fuel oil stocks at ARA dropped 7.2% to 1.4 million tonnes in the week to Oct. 29. Compared with year-ago levels, gasoil inventories were down 1.1%, while fuel oil inventories were 34.2% higher.
The front-month VLSFO crack were at $8.87 per barrel against Dubai crude during Asian trade, up from $8.29 per barrel a day earlier.
The cash differential for Asia’s 0.5% VLSFO was at a premium of $1.38 a tonne to Singapore quotes, compared with $1 per tonne on Wednesday.
Meanwhile, Asia’s cash premium for 380-cst HSFO rose by 37 cents to $2.37 per tonne to Singapore quotes, backed by firmer buying interests in the Singapore physical trade window.
The November crack for 180 cst FO is higher at $0.90 /bbl with the visco spread at $1.00 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh trades 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.