Crude Oil
Oil prices were little changed in choppy trade on Thursday as investors awaited a decision from top crude producers on whether to extend output cuts.
Brent futures rose 20 cent to settle at $39.99 a barrel. U.S. crude rose 12 cents to settle at $37.41 a barrel.
The OPEC+, will meet on Saturday, 6 Jun’20, Algeria’s Ennahar TV channel reported on Friday, citing an OPEC source. The source added that the meeting will discuss extending a deal on oil output cuts. The suggestion by OPEC president Algeria to meet on Thursday was delayed amid talks about poor compliance by some producers.
Saudi Arabia, Kuwait and the United Arab Emirates are not planning to extend voluntary additional output cuts of 1.18 million bpd after June, indicating that crude supply could rise next month regardless of any OPEC+ decision.
Ecuador has declared force majeure after Petroecuador on Wednesday shut the 360 KB/D SOTE pipeline as a preventative measure. Crude exports will not be affected given the level of inventories at the Balao terminal.
Rosneft, which closed its oil trading arm after sanctions were imposed by US authorities in Feb’20, has set up a new Geneva-based trading business, Energopole SA, four trading sources familiar with the matter said.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 392,286 (+5,499 DoD) yesterday, with the total number of confirmed infections at 6,692,686 (+129,990 DoD). (Click here for details). Post the opening of countries from lockdown, it seems that the disease continues to spread more aggressively.
Naphtha
Asia’s naphtha crack hit a 5-1/2-week high of $48.73 a tonne on Thursday as robust demand from petrochemical makers supported the market.
The June crack is lower at -$2.20 / bbl.
The July crack is at -$1.85 / bbl.
Gasoline
Asia’s gasoline crack fell to 13 cents, staying at a premium for a second day after persisting at discounts for two straight weeks.
Singapore’s onshore light distillates stocks surged 11.4% or 1.6 million barrels to hit a four-week high of 15.8 million barrels in the week to June 3, data from Enterprise Singapore showed.
The June crack has improved to $1.10 /bbl.
The July crack is at $1.80 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10 ppm gasoil dropped to 19 cents a barrel to Singapore quotes on Thursday, compared with 35 cents a day earlier.
Singapore onshore middle distillate stocks dipped 2% to a two-week low of 14.6 million barrels in the week ended June 3, Enterprise Singapore data showed. The weekly Singapore middle distillate inventories have averaged at 12.5 million barrels so far in 2020.
The June crack for 500 ppm Gasoil is lower at $0.85 /bbl with the 10 ppm crack at $ 3.35 / bbl. The regrade is at -$ 1.65 /bbl.
The July crack for 500 ppm Gasoil is at $2.90 /bbl with the 10 ppm crack at $ 3.75 / bbl. The regrade is at -$ 2.65 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month 0.5% VLSFO crack against Dubai crude rose to a more than one-week high of $6.70 a barrel on Thursday, despite rising inventories of the fuel.
Singapore’s residual fuel oil inventories edged up to a two-week high in the week ended June 3, as net import volumes jumped to a six-week peak. Onshore fuel oil stocks rose 88,000 barrels, about 14,000 tonnes, on-week to 25.685 million barrels, or 4.045 million tonnes, data from Enterprise Singapore showed. Residual fuel stocks came in 16% higher from a year-ago period, and were near a more than one-year high of 26.172 million barrels, or 4.122 million tonnes, in the week to May 20.
The June crack for 180 cst FO has eased to – $2.00 /bbl with the visco spread at $1.45 /bbl.
The July crack for 180 cst FO is at – $0.85 /bbl with the visco spread at $1.30 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action 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.