Crude Oil
Oil prices fell more than 4% on Friday, and posted a second weekly decline after U.S. President Donald Trump tested positive for COVID-19.
Brent futures fell $ 1.67 to settle at $39.27 per barrel. WTI futures fell $ 1.67 as well to settle at $37.05 per barrel.
Benchmark Brent and U.S. crude each posted a second straight week of losses. Brent was down 7% on the week, while WTI dropped 8%.
The uncertainty surrounding the U.S. president’s health added to a series of jitters, including a lackluster U.S. unemployment report and increased supply from major world oil producers.
This week marked the grim milestone of 1 million deaths and several countries are tightening restrictions and contemplating lockdowns as infections accelerate.
The U.S. labor market recovery slowed in September, as non-farm payrolls increased by 661,000 jobs last month after advancing 1.49 million in August, the U.S. Labor Department said.
Crude supplies from the Organization of the Petroleum Exporting Countries (OPEC) rose in September by 160,000 barrels per day (bpd) from a month earlier. The rise was mainly the result of increased supplies from Libya and Iran – OPEC members that are exempt from the OPEC+ supply pact.
Libya’s production has risen to 270,000 bpd, after the relaxation of a blockade by the Libyan National Army.
US energy firms added 6 oil rigs in the week to 2 Oct’20 to total 189 (-521 YoY), according to Baker Hughes, after price increases in recent months prompted some producers to start drilling again.
Money managers cut their net long US crude futures and options positions by 23,582 contracts to total 302,515 in the week to 29 Sep’20, the US CFTC said on Friday.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,041,543 (+4,013 DoD) yesterday. The total number of active cases rose by around 16,000 DoD to 7. 73 million. (Click here for details).
Naphtha
Asia’s naphtha crack, in contrast to gasoline, extended gains to reach a four-session high of $87.83 a tonne.
The October crack is higher at $ 4.30 / bbl. The November crack is at $ 3.60 /bbl
Gasoline
Asia’s gasoline crack eased to a two-session low of $4.91 a barrel on Friday as inventories built up in Europe and the United States.
Gasoline stocks held independently at ARArose about 2% to a three-week high of 1.3 million tonnes in the week to Thursday. The new inventory level was 45.7% higher than a year ago at 914 KT.
The October crack is higher at $ 6.30 / bbl. The November crack is at $ 5.30 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian refining margins for 10 ppm gasoil slipped on Friday despite weaker feedstock crude prices and expectations for higher Chinese exports for the remainder of this year.
China’s gasoil exports in September stood at a five-month high of 1.72 million tonnes, up from 1.09 million tonnes in August.
Cash differentials for gasoil with 10 ppm sulphur content were at a discount of 56 cents a barrel to Singapore quotes on Friday, compared with a 58-cent discount on Thursday.
Gasoil stocks held independently in ARA slipped 0.7% to 2.8 million tonnes in the week to Oct. 1. ARA jet fuel inventories rose 0.7% to 945,000 tonnes. Compared with a year earlier, ARA gasoil inventories were up 0.5%, while jet fuel stocks were about 48% higher.
The October crack for 500 ppm Gasoil is higher at $2.90 /bbl with the 10 ppm crack at $ 3.70 / bbl. The regrade is at -$ 1.70 /bbl.
The November crack for 500 ppm Gasoil is at $3.05 /bbl with the 10 ppm crack at $ 3.85 / bbl. The regrade is at -$ 1.65 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO market firmed on Friday with cash premiums and refining margins of the fuel climbing to multi-week highs. The front-month VLSFO crack climbed to a more than two-month high of $8.81 a barrel on Friday, up from $8.61 in the previous session and $7.68 on Monday.
A jump in deal activity lifted cash premiums of the fuel to $1.50 a tonne to Singapore quotes, the highest since March 12.
Meanwhile, residual fuel inventories at ARA slipped 3% from the previous week to a two-week low of 1.355 million tonnes in the week ended Oct. 1. Compared with last year, the inventories at the ARA hub were 17% higher and were above the five-year seasonal average of 1.197 million tonnes.
The October crack for 180 cst FO is higher at – $1.25 /bbl with the visco spread at $1.45 /bbl.
The Nover crack for 180 cst FO is at – $2.20 /bbl with the visco spread at $0.90 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
We we add one tranche of November Jap Naphtha – Dubai at current levels of $ 3.60 /bbl. Experienced participants would remember that we would have hedged at these levels in the good old days as well.
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.