Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

U.S. oil prices fell back on Friday, posting a sixth straight weekly loss, despite OPEC signaling that it was ready to pull back on production at any time if fears over Omicron continued to hurt demand for energy.

Brent crude futures settled up 21 cents, or 0.3%, at $69.88 per barrel on its most-active February contract. Brent was down 4% for the week though, and off 18% for the past six weeks combined, after hitting a 2014 high of $86.70 during the week to mid-October.

WTI crude futures settled down 24 cents, or 0.4%, at $66.26 per barrel. For the week, WTI was down 2.8%. It was also off 20% for the past six weeks combined, after hitting a seven-year high of $85.41 during the week ended Oct. 15.

“Plenty of places to point to blame for the big pullback in energy,” said Bob Yawger, director of energy futures at Mizuho in New York, noting coronavirus cases are rising, the U.S. jobs report was a disappointment and OPEC+ stuck with its plan to increase output in January.

After opening higher, Wall Street also reversed direction with the Nasdaq tumbling more than 2%, on jobs data, and uncertainty around the Omicron variant and the path of the Federal Reserve’s policy tightening.

U.S. drillers, meanwhile, kept the number of oil rigs unchanged this week, after previously adding rigs for five consecutive weeks to their highest level since April 2020, according to energy services firm Baker Hughes Co.

At a global level, the death toll from the COVID-19 virus rose to 5.27 Million (+6,019 DoD) yesterday. The total number of active cases rose by 100,000 DoD to 21.15 million. (Click here for details).

Asia’s naphtha crack was at $140.98 per tonne on Friday, down from $146.18 a tonne on Thursday.

ARA naphtha inventories rose 6.9% to 263,000 tonnes as higher freight rates weighed on demand.

The January crack is lower at $ 3.60 /bbl.

Asia’s gasoline cracks dipped on Friday as traders remain concerned near-term demand would take a hit if governments reimpose wider mobility curbs to contain the Omicron coronavirus variant.

Refining profit margins, also known as cracks, for gasoline slipped to $8.28 per barrel on Friday, compared with $8.79 per barrel a day earlier.

Gasoline stocks held independently in the ARA refining and storage hub rose 1.1% to 846,000 tonnes in the week to Dec. 2, data from Dutch consultancy Insights Global showed.

The January crack is lower at $9.95/ bbl.

Click Here for a graphical depiction of Global Gasoline stocks by region.

Asia’s refining profit margins for 10 ppm gasoil climbed for a third consecutive session on Friday, posting their first weekly rise in four, supported by tight regional supplies.

Cash differentials for gasoil with 10 ppm sulphur content  were 18 cents higher at a premium of 44 cents per barrel over Singapore quotes.

Refining margins, or cracks, for 10 ppm gasoil rose 57 cents to a more than two-week high of $12.29 a barrel over Dubai crude during Asian trading hours. The cracks have gained 30% last week, their steepest weekly gain since October last year.

According to Refinitiv Oil Research assessments the country is expected to return to the spot market in December, exporting at least 250,000 tonnes. Gasoil exports from India are also expected to see an uptick as domestic demand drops after the peak festive season, while refiners have ramped up run-rates, market watchers said.

Gasoil stocks held independently in the ARA refining and storage hub slipped 1.1% to 1.8 million tonnes in the week ended Dec. 2, according to Dutch consultancy Insights Global.

Cash differentials for Jet dipped by 2 cents to a premium of 50 cents over Singapore quotes. 

ARA jet fuel inventories inched up 0.2% this week to 809,000 tonnes. 

The January crack for 500 ppm Gasoil is higher at $11.15/bbl with the 10 ppm crack at $12.15 /bbl. The regrade is at -$1.00 /bbl.

Click Here for a graphical depiction of Global Distillate stocks by region.

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) cash differential slipped on Friday, retreating from Thursday’s near two-year high and ending an eleven-session rally. The VLSFO cash premium slipped to $22.36 a tonne to Singapore quotes on Friday, down from $22.60 a tonne in the previous session.

In the high-sulphur fuel oil (HSFO) market, weak demand helped push cash differentials for cargoes of both 180-cst HSFO and 380-cst HSFO to their widest discounts since late-June at minus $1.54 per tonne and minus $1.09 per tonne, respectively.

Fuel oil stocks in the ARA refining and storage hub jumped 13%, or 145,000 tonnes, to a near five-month high of 1.273 million tonnes in the week ended Dec. 2, data from Dutch consultancy Insights Global (IG) showed.

The January crack for 180 cst FO is lower at  -$6.35 /bbl with the visco spread at $1.30 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

No Fresh trades 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.

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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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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