Crude Oil
Oil prices fell on Thursday as the Covid 19 epidemic showed no signs of slowing. Brent crude futures dropped $1.14 to settle at $49.99 a barrel. WTI futures fell 88 cents to settle at $45.90 a barrel.
Oil’s losses came even as OPEC agreed to cut crude output by an extra 1.5 mbpd in the second quarter, its deepest cut since the 2008 financial crisis. The group made its action conditional on Russia and others joining.
Russia has so far indicated that it would back an extension rather than deeper production cuts. Russia appears to be fiscally prepared to cope with a drop in oil prices, the Russian Finance Minister said on Thursday, as OPEC tries to convince Moscow to support the market with a deeper output cut in the wake of the coronavirus outbreak. It will take part in the OPEC+ ministerial meeting in Vienna on Friday.
At a global level, the death toll from the COVID-19 in rose to 3385 (+82 DoD) yesterday, with the total number of confirmed infections at 98422 (+2941 DoD). The growth factor of new cases has climbed back to 1.35 over 0.89 on Wednesday.(Click here for details).
Naphtha
Asia’s naphtha crack 13% on Thursday to a two session high of $45.70 a tonne.
The March crack has improved to – $3.60 / bbl.
The April crack is at – $4.25 / bbl.
Gasoline
Asia’s gasoline crack settled at a one-week high of $5.51 a barrel.
Singapore’s light distillate inventories, in the week to March 4, surged 1.39 million barrels (10%) to reach a 10-month high of 14.2 million barrels.
The March crack is lower at $5.25 /bbl.
The April crack is at $40. /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10 ppm gasoil flipped into a discount of 8 cents per barrel to Singapore quotes on Thursday, compared with a narrow premium of 2 cents per barrel in the previous session.
Cash discounts for jet fuel were at 20 cents per barrel to Singapore quotes on Thursday, compared with a discount of 32 cents per barrel on Wednesday.
Singapore onshore middle distillate stocks rose 4.3% to a five-month high of 11.9 million barrels in the week ended March 4, Enterprise Singapore data showed. Weekly middle distillate inventories have averaged 10.99 million barrels so far in 2020, compared with 11.1 million barrels in 2019. Overall, onshore middle distillate inventories were 2.8% lower year-on-year.
The March crack for 500 ppm Gasoil is lower at $8.50 /bbl with the 10 ppm crack at $ 9.40 / bbl. The regrade is at -$ 1.50 /bbl.
The April crack for 500 ppm Gasoil is at $8.50 /bbl with the 10 ppm crack at $ 9.40 / bbl. The regrade is at -$ 1.65 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The cash differential for 0.5% VLSFO in Asia slipped on Thursday, edging closer to a record low hit on Tuesday amid an absence of demand for cargoes of the fuel in the Singapore trading window. The VLSFO cash discount was at minus $4.67 a tonne to Singapore quotes, down from minus $4.41 a tonne in the previous session. The cash differential hit a record low of minus $5.13 on Tuesday.
Sluggish marine fuel demand at the world’s top bunkering hub lifted residual fuel oil inventories in Singapore 5% higher in the week ended March 4 despite weaker net import volumes. Onshore fuel oil stocks rose by 1.15 million barrels to 26.12 million barrels from the previous week, data from Enterprise Singapore showed.
Residual fuel stocks were 28% higher than the year-ago period.
The March crack for 180 cst FO is higher at -$7.00 /bbl with the visco spread at $0.70 /bbl.
The April crack for 180 cst FO is at -$7.05 /bbl with the visco spread at $0.85 /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 refiner.
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.