Crude Oil
Crude prices posted their biggest-one day gains on record on Thursday after President Donald Trump said he expects Russia and Saudi Arabia to announce a major oil production cut.
Brent crude futures fell $ 5.20 to settle at $ 29.90 /bbl. WTI futures rose $5.01 to $25.32 a barrel.
President Trump said he had spoken to Saudi Crown Prince Mohammed bin Salman, and expects Saudi Arabia and Russia to cut oil output by as much as 10 million to 15 million barrels, as the two countries signaled willingness to make a deal. Saudi Arabia said it would call an emergency meeting of the OPEC, Saudi state media reported.
With fuel demand expected to fall by 20% to 30% in coming months, pressure was building on oil producers to reach a deal, and Trump expressed growing frustration about the crude price and its effect on the energy industry.
Texas regulators are exploring the possibility of cutting production in that state, which produces more than 5 million bpd. An estimated 31 shale-well frackers, or 11% of those currently operating, were turned off in the last week, according to data from consultancy Primary Vision, and more than 40% of the 421 operating a year ago have been side-lined.
The US will not ask US domestic oil companies for a coordinated cut in production to counter a historic meltdown in global prices and is still awaiting the details of planned cuts in Saudi Arabia and Russia, a senior administration official told Reuters on Thursday.
The US DOE announced Thursday that it was making 30 MB of space available for US producers to store crude. The DOE said it would make an additional 47 MB of storage space, accounting for the remainder of its total capacity, available at a later date.
The Russian energy minister said Thursday that a production cut is not enough to compensate for the fall in demand caused by the coronavirus pandemic, adding is inadvisable for Russian producers to increase production.
The United States would lift its sanctions on two units of Russian oil company Rosneft if it is clear the company is no longer involved in Venezuela, two US officials said on Thursday. Rosneft said last Saturday it was selling its Venezuelan assets.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 53,218 (+5,973 DoD) yesterday, with the total number of confirmed infections at 1,015,877 (+79,920 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack on Thursday hovered near a 12-year low by falling 13.7% to a discount of $26.83 a tonne to Brent crude on ample supplies.
The April crack has improved to -$3.45 / bbl.
The May crack is at -$5.15 / bbl.
Gasoline
Asia’s gasoline crack remained in discounts to Brent since March 16 as demand has been crushed by lockdowns and restricted movements of people amid the spread of the coronavirus. The crack value on Thursday at a discount of $6.41 a barrel rose 5.5% from the previous session but the current value is in stark contrast to the premium of $5.09 seen at the start of the year.
Light distillate stocks in Singapore fell by 1.1 million barrels to 14.10 million barrels as on April 1, 2020, data from Enterprise Singapore showed.
The April crack has also dropped to -$3.45 /bbl
The May crack is at -$5.15 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for jet fuel widened by a cent to $2.85 per barrel to Singapore quotes on Thursday.
The April/May time spread for jet fuel in Singapore traded at discount of $2.80 per barrel on Thursday.
Cash discounts for 10 ppm gasoil were at 96 cents per barrel to Singapore quotes on Thursday, the widest discounts since December 2018. They were at a discount of 81 cents a barrel on Wednesday.
Singapore middle distillate stocks drew 1.5% to a two-week low of 12.9 million barrels in the week ended April 1, Enterprise Singapore data showed. Weekly middle distillate inventories have averaged 11.4 million barrels so far in 2020, compared with 11.1 million barrels in 2019. Overall, onshore middle distillate inventories were 18.2% higher year-on-year.
Cash discounts for 10 ppm gasoil widened to 81 cents per barrel to Singapore quotes on Wednesday, a level not seen since December 2018. They were at a discount of 76 cents a barrel on Tuesday.
The April crack for 500 ppm Gasoil has dropped to $9.30 /bbl with the 10 ppm crack at $ 10.80 / bbl. The regrade is at -$ 8.00 /bbl.
The May crack for 500 ppm Gasoil is at $7.10 /bbl with the 10 ppm crack at $ 8.10 / bbl. The regrade is at -$ 6.15 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The cash differential and prompt-month time spread time for 0.5% very low-sulphur fuel oil VLSFO in Asia fell to record lows on Thursday weighed by sluggish demand for marine fuels and ample supplies.
The VLSFO cash discount was at minus $7.22 a tonne to Singapore quotes, down from minus $4.53 a tonne in the previous session and its lowest ever since records began in December.
Similarly, the April/May VLSFO time spread fell to minus $9 per tonne, down from minus $7 a tonne on Wednesday, its lowest since mid-October.
Singapore’s residual fuel oil inventories slipped 2% to a seven-week low in the week to April 1, official data showed on Thursday, amid persistently weak net import volumes and weak bunker fuels demand. Onshore fuel oil stocks fell by 554 KB to 24.229 million barrels from the previous week, data from Enterprise Singapore showed. Residual fuel stocks were 12% higher than a year earlier.
The April crack for 180 cst FO has eased to $0.70 /bbl with the visco spread at $0.95 /bbl.
The May crack for 180 cst FO is at -$2.65 /bbl with the visco spread at $0.90 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Yesterday’s FO hedge closes out today as prices jump around crazily. No fresh trades for 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.