Crude Oil
Oil prices rose more than 2% on Tuesday, reaching their highest in 12 months after major producers showed they were reining in output roughly in line with their commitments.
Brent crude settled up $1.11, or 2.0%, at $57.46 a barrel in its third straight day of gains. Earlier it touched $58.05, the highest levels since January last year. WTI futures gained $1.21, or 2.2%, to settle at $54.76, after hitting a session high of $55.26, the highest in a year.
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The rally picked up steam as the U.S. Congress looked ready to adopt an economic stimulus package, and as cold U.S. weather boosted heating oil demand.
Crude output from the Organization of the Petroleum Exporting Countries rose for a seventh month in January but the increase was smaller than expected, a Reuters survey found.
Iran has agreed to allow the crew members of a South Korean ship it seized for alleged environmental pollution to leave the country, a Foreign Ministry spokesman said on Tuesday.
api data
The data released by the API was distinctly bullish as surprise draws were reported across the board in contrast to expected builds. We await the official data from the DOE today.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,262,004 (+14,457 DoD) yesterday. The total number of active cases fell by around 80,000 DoD to 26.16 million. (Click here for details).
Naphtha
Asia’s naphtha crack gained for a second session on Tuesday to $ 109.48 per tonne, while traders eyed more purchase tenders from North Asian buyers to gauge price direction this month.
Naphtha arbitrage supplies from west arriving in Asia in March are about 1.68 million tonnes so far, nearing the 2 million tonnes each in January and February, data on Refinitiv Eikon showed. Traders flagged concerns that a narrowing east-west spread may curb supplies from Europe although U.S. exports to Asia remained robust.
The February crack is lower at $2.30 /bbl.
Gasoline
Asia’s gasoline crack was little changed yesterday at $3.83 per barrel.
Gasoline exports from Asian refining centres are assessed at 4.1 million to 4.2 million tonnes in January, lower compared to the 2020 monthly average of some 4.7 million tonnes, according to Refinitiv Oil Research.
India’s gasoline sales rose by 5.9% year-on-year in January to about 2.36 million tonnes, preliminary data showed on Tuesday.
The February crack is lower at $5.10 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian refining margins for jet fuel rose on Tuesday to their strongest in nearly two weeks, helped by tighter supplies of the aviation fuel and hopes that COVID-19 vaccines would help boost cross-border travel in coming months.
Cash differentials for jet fuel were at a discount of 17 cents per barrel to Singapore quotes on Tuesday, compared with a 16-cent discount a day earlier.
The Feb/March time spread for the aviation fuel in Singapore widened its contango by a cent to trade at a discount of 26 cents per barrel, Refinitiv Eikon data showed.
Airline capacity has dropped further amid major disruption due to new coronavirus variants and ongoing travel restrictions and lockdowns, with global capacity now at 782.2 million for Q1’21 compared to 1.258 billion in 2020, according to data from OAG. However, global scheduled flight seats rose for the first time in six weeks to be down 49.9% year-on-year in the week to Monday, compared with a 51.9% drop in the preceding week, OAG data showed.
Cash differentials for 10 ppm gasoil flipped back into a discount of 1 cent today. There were at a premium of 2 cents on Wednesday.
The February crack for 500 ppm Gasoil is higher at $5.65 /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
No fresh news in this market.
The January crack for 180 cst FO is lower at -$2.95 /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.