Oil prices tumbled more than 3% on Thursday, as new COVID-19 lockdown measures in China added to worries that high inflation and interest rate hikes are denting fuel demand.
Brent futures settled down $3.28, or 3.4%, at $92.36 per barrel, after a session low at $92.13. Brent fell 2.8% on Wednesday and 5% on Tuesday.
WTI settled down $2.94, or 3.3%, at $86.61. It fell 2.3% on Wednesday and 5.5% on Tuesday.
“Western-world oil demand, as well as China’s, is stagnant, while supplies are expanding incrementally, largely on the back of the U.S. shale boom,” said Julius Baer analyst Norbert Rucker.
Southern Chinese tech hub Shenzhen tightened COVID-19 curbs as cases kept increasing. Large events and indoor entertainment were suspended for three days in the city’s most populous district, Baoan.
The main European stocks index fell to seven-week lows as worries deepened about aggressive rate hikes to fight record inflation.
The dollar index hit a 20-year high after U.S. data showed a resiliently strong economy, giving the Federal Reserve more room to raise interest rates.
Asia’s naphtha crack recouped some losses amid weakness in crude oil benchmarks. The margin stood at a discount of $57.63 a tonne from a discount of $91.63 a day earlier.
On Thursday, the front-month second-half October naphtha was $2.25 a tonne cheaper than the following month.
The September crack is higher at -$ -19.55 per barrel
Asia’s refining profit margin for gasoline extended losses on Thursday on poor demand outlook globally and renewed COVID-19 curbs in key oil-importing economy China.
Discount on the crack rose to 45 cents a barrel from 2 cents a barrel on Wednesday. Large build ups at major trading hubs have led to a decline in gasoline margins that shrank by more than 100% in August.
Singapore’s onshore inventories of light distillates dropped 1.017 million barrels to a six-week low of 16.332 million barrels in the week to Aug. 31, official data showed..
The September crack is higher at $0.80 per barrel.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s refining margins for gasoil with 10 ppm sulphur content fell on Thursday, after stocks in the Singapore hub rose to a two-week high and as worries over slowing demand in top consumer China weighed after fresh lockdown measures were announced.
Cash differentials for 10 ppm gasoil stood at a premium of $1.95 a barrel to Singapore quotes, down from $2.20 in the previous session.
Refining margins or cracks for 10 ppm gasoil fell to $44.25 a barrel over Dubai crude in Asian trading hours, compared with $49.21 on Wednesday.
Cash differentials for jet dipped to a premium of $2.44 a barrel to Singapore quotes, up from a premium of $2.58 a barrel in the previous session.
Refining margins or for jet fell to $38.25 a barrel over Dubai crude during Asian trading hours, compared with $42.36 on Wednesday.
Singapore stocks of middle distillates rose 507,000 barrels to a two-week high of 7.738 million barrels in the week to Aug. 31, official data showed.
The September crack for 500 ppm Gasoil is higher at $40.55 /bbl with the 10 ppm crack $45.55 /bbl. The 10 ppm regrade is at -$6.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s fuel oil market weakened further on Thursday as competitive selling interest persisted, while inventories at key trading hub Singapore hit a 19-week high.
The cash differential for 0.5% very low sulphur fuel oil (VLSFO) fell $2.56 to a premium of $1.41 per tonne, sliding to its lowest since October 2021.
The 380-cst HSFO cash differential dipped $1.32 to a premium of $2.43 per tonne on Thursday, while the 180-cst HSFO cash differential rose $1.42 to a premium of $4.93 per tonne.
Singapore fuel oil inventories rose 7% to 22.67 million barrels (3.57 million tonnes) in the week to Aug. 31, hitting a 19-week high, latest data from Enterprise Singapore showed.
The September crack for 180 cst FO is higher at – $22.55 /bbl with the visco spread at $4.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
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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.