Crude Oil
Investing.com – Oil prices jumped 4% Thursday as the OPEC+ producers’ alliance bucked expectations for a hike in output starting in April, with cartel leader Saudi Arabia sticking to its 1 million barrels per day cut while Russia and Kazakhstan opted for just modest increases.
Brent futures settled rose $2.67, or 4.2%, to settle at $66.74. Brent soared to $67.72 earlier in the day, also its highest since January 2020.
WTI crude settled up $2.55, or also 4.2%, at $61.28 per barrel. It hit a high of $64.86 during the session, a peak going back to January 2020.
With Saudi Arabia refusing to roll back on its voluntary cut and Russia agreeing to add just 130,000 bpd from next month and Kazakhstan a 20,000-bpd rise, totaling 150,000 bpd, this was 70% less than what the market expected.
Analysts and traders continue to say, however, that the rally in the oil futures price from below $40/bbl to above $60/bbl now is out of step with demand with physical sales only expected to match supply later in 2021.
Trafigura has proposed using its Corpus Christi terminal in Texas and the wider hub to allow pricing agency Platts to include US crude oil in its Dated Brent benchmark without restricting trade.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,580,792 (+9,955 DoD) yesterday. The total number of active cases rose by around 40,000 DoD to 21.75 million. (Click here for details)
Naphtha
Asia’s naphtha market held steady on Thursday while the gasoline crack edged down after Singapore inventories rose. The crack to Brent rose by 97 cents to settle at $114.35 / MT.
Taiwanese refiner Formosa Petrochemical has started talks on Thursday to buy light and heavy naphtha for second-half April delivery. Formosa’s tender comes after YNCC bought at least five cargoes on Wednesday at steady to higher premiums from first half April.
The March crack is lower at $1.80 /bbl
The April crack is at $1.30 /bbl
Gasoline
Asia’s gasoline crack edged down after data from Enterprise Singapore showed light distillates stocks in the city state rose 419,000 barrels to a four-week high of 15.907 million barrels in the week to March 3. The crack settled 19 cents lower at $5.46 / bbl.
The March crack is lower at $6.60 /bbl.
The April crack is at $7.10 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10 ppm Gasoil slipped a couple of cents to a discount of 21 cents per barrel.
Singapore’s middle distillate inventories slipped 6.5% to a three-week low of 14.5 million barrels in the week ended March 3, according to Enterprise Singapore data.
Asia’s cash differentials for jet fuel dropped on Thursday to their lowest in over four months, weighed down by persistent weakness in aviation demand as COVID-19 restrictions continue to hammer passenger traffic. Cash discounts for jet fuel widened to 57 cents per barrel to Singapore quotes, a level not seen since Oct. 30. They were at a discount of 49 cents per barrel a day earlier.
The March/April time spread for the aviation fuel in Singapore widened its contango structure by 10 cents on Thursday to trade at a discount of 40 cents per barrel, Refinitiv Eikon data showed.
Global air passenger traffic for January showed demand was down 72% compared with the pre-COVID-19 levels of January 2019, and also a deterioration from a 69.7% year-on-year decline in December, the International Air Transport Association (IATA) said on Tuesday.
The March crack for 500 ppm Gasoil is lower at $5.00 /bbl with the 10 ppm crack at $ 6.30 / bbl. The regrade is at -$ 1.45 /bbl.
The April crack for 500 ppm Gasoil is at $6.00 /bbl with the 10 ppm crack at $ 6.80 / bbl. The regrade is at -$ 1.70 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% very low-sulphur fuel oil (VLSFO) front month time spread and crack slipped on Thursday, amid muted trade and rising Singapore fuel oil inventories.
The VLSFO crack fell to $14.26 a barrel above Dubai crude, while the April/May time spread slipped to $2.25 a tonne, Refinitiv data in Eikon showed.
Singapore residual fuel oil inventories jumped 7% to a six-week high in the week ended March 3, as exports from the storage and trading hub dropped, official data showed on Thursday. Onshore fuel oil stocks jumped by 1.509 million barrels, or about 238,000 tonnes, to 19.379 million barrels, or 3.449 million tonnes, Enterprise Singapore data showed.
The March crack for 180 cst FO is lower at -$3.95 /bbl with the visco spread at $0.85 /bbl.
The April crack for 180 cst FO is at -$3.65 /bbl with the visco spread at $0.95 /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.