Crude Oil
Oil prices settled lower on Thursday, at one point touching their lowest since early August as U.S. unemployment data fed fears of a slow recovery for the economy.
Brent crude fell 36 cents to settle at $44.07 a barrel, while WTI 14 cents to $41.37 per barrel.
Both benchmarks had fallen more than 2% earlier in the session. U.S. stock prices sank after Labor Department data showed the number of Americans filing new claims for unemployment reached a seasonally adjusted 881,000 for the latest week. Continuing claims remained high, with millions out of work.
Offshore oil production in the US-regulated northern Gulf of Mexico was down by 16.3%, or 301 KB/D as recovery from Hurricane Laura continues, the US BSEE said on Thursday.
Iraq’s oil exports slipped to a five-year low in Aug’20 of 3.02 MB/D, the lowest since Feb’15, indicating its compliance with OPEC+ production cuts may be improving.
A new fire broke out on a supertanker carrying about 2 MB of oil in the Indian Ocean off the east coast of Sri Lanka, spokesmen for the country’s navy said on Thursday, adding that one of its 23 crew was missing and another injured.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 872,523 (+5,901 DoD) yesterday. The total number of active cases rose by 65,000 to 6,933,497. (Click here for details).
Naphtha
Asia’s naphtha crack rose for the third straight session on Thursday to hit a 5-week high of $79.05 a tonne, on the back of strong demand and tighter supplies.
The stronger fundamentals were reflected in the latest spot deal where prices in South Korea returned to the positive zone for the first time in about three weeks.
The September crack has soared to $1.80 /bbl. The October crack is at $ 1.30 / bbl
Gasoline
Asia’s gasoline crack was at a three-session high of $1.64 a barrel notwithstanding an increase of stockpiles in Singapore.
Singapore’s onshore light distillates inventories, rose by about 2.8%, or 381,000 barrels, to reach a two-week high of 14 million barrels in the week to Wednesday, data from Enterprise Singapore showed. The current stockpile level is 24% higher compared with the same week in 2019.
The September crack is higher at $2.90 / bbl. The October crack is at $ 2.90 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian refining margins weakened on Thursday, lingering close to multi-month lows. Refining margins or cracks for jet fuel were at a discount of $1.55 a barrel to Dubai crude during Asian trading hours, compared with minus $1.21 a barrel on Wednesday.
Cash discounts for jet fuel remained unchanged at $1.22 a barrel to Singapore quotes on Thursday.
Singapore’s middle distillate inventories jumped 11.6% to their highest in more than nine years in the week to Sept. 2. Onshore middle distillate stocks rose 1.662 million barrels to 16.024 million barrels, according to Enterprise Singapore data. Weekly Singapore middle distillate inventories have averaged about 13.1 million barrels so far in 2020. This week’s stocks were 46.6% higher year on year..
The September crack for 500 ppm Gasoil is lower at $2.65 /bbl with the 10 ppm crack at $ 3.15 / bbl. The regrade is at -$ 4.95 /bbl.
The October crack for 500 ppm Gasoil is at $2.95 /bbl with the 10 ppm crack at $ 3.45 / bbl. The regrade is at -$ 4.50 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash differentials for Asia’s HSFO and 0.5% VLSFO cargoes fell on Thursday as buying interest in the Singapore trading window was nearly absent.
180-cst HSFO cash premium fell to a more than one-week low of $1.81 a tonne to Singapore quotes while the 380-cst HSFO premium fell to 31 cents a tonne, a near one-week low.
Similarly, limited buying interest dragged the VLSFO cash discount to a near two-week low of minus $3.28 per tonne to Singapore quotes.
Singapore has seen a rise in demand for HSFO from the growing number of ships that have completed scrubber installations, given the limited availability of the grade at smaller ports, with sales of 380CST HSFO rising 25% MoM to 928 KT in Jul’20.
The September crack for 180 cst FO is lower at – $2.25 /bbl with the visco spread at $0.85 /bbl.
The October crack for 180 cst FO is at – $2.75 /bbl with the visco spread at $0.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
We will add one more tranche of October Jap Naphtha – Dubai at curent levels of $ 1.30 /bbl
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.