Oil prices fell more than 4% on Tuesday as weak manufacturing data had investors worried that a slowing global economy could dent oil demand. Brent crude futures fell $2.66 to settle at $62.40 a barrel. WTI crude futures fell $2.84 to settle at $56.25 a barrel.
The OPEC+ group agreed to extend oil supply cuts until March 2020 in their meeting on Tuesday.
Signs of a global economic slowdown, which could hit oil demand growth, means OPEC and its allies could face an uphill battle to shore up prices by reining in supply.
Growth in China’s services sector slowed to a four-month low in June as new orders from overseas customers fell, a private survey showed on Wednesday, adding to signs of strain on the economy as the U.S.-Sino trade war drags on. The Caixin/Markit services purchasing managers’ index (PMI) fell to 52.0 in June, the lowest since February and down from May’s 52.7. The 50-mark separates growth from contraction.
A year-old bottleneck of crude in West Texas is shifting east as new pipelines prepare to begin operations without enough connections or storage for the smooth movement of shale oil to a U.S. Gulf Coast export hub, according to traders and analysts. The start-up of three new pipelines by year-end from the Permian Basin was expected to bring about 2 million new barrels per day to export terminals around Corpus Christi.
Venezuela’s oil exports recovered in June from a sharp drop the month before, helped by increased deliveries to China, which is now state-run oil firm PDVSA’s primary destination for its crude, according to company records and Refinitiv Eikon data. PDVSA and its joint ventures exported 1.1 million barrels per day (bpd) of crude and refined products last month, a 26% increase over May. Chinese buyers took 59% of the shipments, followed by India with 18% and Singapore with 10%, the documents showed.
China has issued more crude oil import quotas for mostly private refiners that will allow them to bring in an additional 56.85 million tonnes for the remainder of 2019, a document reviewed by Reuters showed on Tuesday. This will bring the total quotas issued this year to 151 million tonnes of crude oil, or roughly 3.02 million barrels per day (bpd). The amount is equivalent to about 30% of China’s total crude oil imports in the first five months of this year at 9.91 million bpd as reported by official customs data.
U.S. crude inventories fell by 5 million barrels in the week to June 28 to 469.5 million. Gasoline stocks also dipped marginally. Government data is due to be released on Wednesday.
Asia’s naphtha crack for second-half August eased 20 cents to a two-session low of $25.95 a tonne due to ample supplies.
Buyers now have the option of replacing some of their naphtha with cheaper LPG, a commodity whose prices usually fall in summer as it is used for heating during winter. The ongoing cracker maintenance season and recent outages in South Korea and Japan also contributed to the overall slower demand since May.
The July crack is stronger at -$ 6.05 /bbl
Asia’s gasoline crack rose on Tuesday to a near 7-week high of $5.36 a barrel to mirror the stronger market in the United States, where petrol inventories were expected to have dropped following supply disruptions.
Gasoline exports from Europe to the U.S. East Coast had risen in recent days after the shutdown of the 335 kbpd Philadelphia refinery. In Asia, refiners such as Formosa will scale back on its gasoline production this month. .
The July crack is stronger at $ 7.35 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash discounts for 10ppm gasoil were at 18 cents a barrel to Singapore quotes on Tuesday, as against a 10-cent discount in the previous session.
The July-August time spread widened to a discount of 18 cents per barrel on Tuesday, compared with 5 cents a barrel on Monday.
Cash differentials for jet fuel were at a discount of 2 cents a barrel to Singapore quotes on Tuesday.
The July crack for 500 ppm Gasoil is slightly higher at $ 14.95 /bbl with the 10 ppm crack at $ 15.60 / bbl. The regrade is at +$ 0.25 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s cash premiums for mainstay 380-cst fuel oil dipped on Tuesday, drifting away from a near eight-month high touched last week.
Cash premiums for 380-cst HSFO were at $8.55 a tonne to Singapore quotes, down from $9.20 per tonne a day earlier.
Asia’s 180-cst fuel oil crack to Dubai crude for August fell to minus $1.53 a barrel during Asian trade on Tuesday, compared with minus 41 cents on Monday.
The more actively-traded 380-cst barge crack to Brent crude dipped to minus $8.97 a barrel during Asian trading hours, compared with minus $8.69 per barrel a day earlier.
The 380-cst July/August time spread traded at $14.75 a tonne, down from $15.50 a tonne in the previous session.
The July180 cst crack is stronger at + $ 0.95 / bbl with the visco spread at $ 1.00 /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.