Crude Oil
Oil prices hovered below five-month highs on Thursday, falling after a session in which bearish sentiment about fuel demand counteracted optimism about Iraq’s supply cuts, pushing the benchmarks in and out of positive territory.
Brent crude settled down 8 cents at $45.09 a barrel, while WTI fell 24 cents to $41.95 after a four-day streak of gains.
The dollar index logged its biggest monthly percentage fall in a decade in July. The index was up around 0.1% Thursday after falling for two sessions, but stayed near two-year lows.
Iraq said on Thursday it would make an additional cut in its oil production of about 400 KB/D in Aug’20 to compensate for its overproduction over the past period under the OPEC+ supply reduction pact.
Saudi Aramco has cut the OSPs for its crude to Asia and Europe, while leaving them unchanged for the US, in line with market expectations, tracking falling Middle East benchmarks and weak refining margins, according to a Reuters survey.
BP is preparing to sell a large chunk of its oil and gas assets even if crude prices bounce back from the COVID-19 crash because it wants to invest more in renewable energy, three sources familiar with BP’s thinking said.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 716,751 (+6,464 DoD) yesterday, with the total number of confirmed infections at 19,246,674 (+281,002 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack fell to a three-session low of $55.83 a tonne on Thursday.
The August crack is higher at $ -0.15 /bbl. The September crack is at -$0.40 /bbl.
Gasoline
Asia’s gasoline margin rose for a third straight day on Thursday to reach a seventh-session high of $1.11 a barrel following a sharp drop in inventories in the key regional trading hub of Singapore.
Light distillate stocks in Singapore dropped by close to 2 million barrels to 14.6 million barrels, data released by Enterprise Singapore showed.
The August crack has risen further to $2.40 /bbl. The September crack is at $2.30 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash discounts for jet fuel widened on Thursday as airlines around the globe continue to struggle through a resurgence in coronavirus cases. Cash differentials for jet fuel were at a discount of 54 cents a barrel to Singapore quotes on Thursday, compared with a discount of 45 cents per barrel a day earlier.
Air passenger traffic, which showed signs of an uptick on domestic routes and as some countries relaxed coronavirus-related restrictions, has again pulled back with the renewed wave of infections.
Lufthansa Group plans to return to 95% of the prior-year capacity for short- and medium-haul routes and to 70% of capacity for long-haul routes by the end of the year, the company said on its website 6 Aug’20.
Middle distillate stocks in Singapore rose by close to a million barrels to 14.6 million barrels, data released by Enterprise Singapore showed.
The August crack for 500 ppm Gasoil is lower at $4.90 /bbl with the 10 ppm crack at $ 6.10 / bbl. The regrade is at -$ 4.10 /bbl.
The September crack for 500 ppm Gasoil is at $5.10 /bbl with the 10 ppm crack at $ 5.90 / bbl. The regrade is at -$ 4.20 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
A resurgence of buying interest for cargoes of Asia’s 380-cst HSFO sent prompt month time spreads and cash differentials of the fuel higher on Thursday.
The returning demand flipped the balance of Aug/Sept time spread back to backwardation at plus $1 per tonne to Singapore quotes, from minus 50 cents per tonne in the previous session.
Fuel Oil stocks in Singapore rose by 642 KB to 22.9 million barrels, data released by Enterprise Singapore showed.
The August crack for 180 cst FO is lower at – $2.90 /bbl with the visco spread at $0.90 /bbl.
The September crack for 180 cst FO is at – $3.15 /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 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.