Crude Oil
Oil futures gave up early gains and settled narrowly mixed on Thursday, as OPEC and its partner Russia gave mixed signals about possible further output cuts. Brent futures fell 35 cents to settle at $54.93 a barrel. WTI crude futures rose 20 cents to settle at $50.95 a barrel.
Both contracts rose more than $1 a barrel early, then pared gains as traders waited to see whether Russia was on board with possible further output cuts along with OPEC.
The death toll from the coronavirus in mainland China rose to 637 (+73 DoD) at the end of Thursday. Across China, the total number of confirmed infections was 31,211 (+3,151 DoD). The WHO said it was too early to say the disease had peaked in China, but noted that Wednesday was the first day that the number of new cases in China had dropped. Hopes the outbreak may be settling have injected some optimism into an oil market that has fallen more than 15% this year.
US crude flows to Europe are set to increase over the coming month as demand from Asia has plummeted due to the coronavirus outbreak, with activity to charter Aframax vessels, which can carry about 600KB of crude, busy for the trans-Atlantic route according to shipbrokers.
India’s Reliance Industries and US-based Chevron on Thursday defended their business with Venezuela from White House criticism, noting that their marketing agreements and operations in the OPEC nation have been approved by Washington.
Naphtha
Asia’s naphtha crack was at a one-week high of $86.20 a tonne rising from $78.10 on Wednesday.
Demand from China, South Korea, Singapore and Japan drove prices upwards.
The February crack has improved to – $ 1.40 / bbl. The March crack is at – $2.45 / bbl
Gasoline
Asia’s gasoline clawed back to a two-session high of $7.26 a barrel on Thursday supported by petrol supply cuts made by refiners.
Gasoline exports from China fell in January while its refiners cut crude oil throughputs amid the coronavirus outbreak that has slammed domestic fuel demand.
Singapore onshore light distillates stocks edged up by 468 KB to reach a near 9-1/2 month high of 13.52 million barrels in the week to Wednesday, data from Enterprise Singapore showed. The current inventory level was, however, about 15.7% lower than a year ago.
The data also showed that about 35,000 tonnes of gasoline were shipped to Singapore from Switzerland between Jan. 30 and Feb. 4. Europe does not typically ship gasoline to Asia.
The February crack is higher at $8.10 /bbl.
The March crack is also at $8.10 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10 ppm sulphur content were at 69 cents per barrel to Singapore quotes, down from 74 cents a barrel on Wednesday.
Cash premiums for jet fuel fell for a fourth consecutive session to 9 cents per barrel over Singapore quotes on Thursday, the lowest since Jan. 10. They were at a premium of 10 cents a barrel on Wednesday. The prompt-month time spread for the aviation fuel traded at a discount of 3 cents per barrel on Thursday.
More than two dozen airlines have suspended or restricted flights to China and several countries, including the United States, have banned entry to anyone who has been in China over the previous two weeks.
Global air cargo volumes dropped 2.7% in December, compared with the same period in 2018, the International Air Transport Association (IATA) said on Wednesday. For 2019, global air freight demand plunged 3.3% compared to 2018, the IATA said.
Singapore onshore middle distillate stocks fell 4.7% to a three-week low of 10.7 million barrels in the week to Feb. 5, Enterprise Singapore data showed. Weekly middle distillate inventories have averaged 10.5 million barrels so far in 2020, having averaged 11.1 million barrels a week in 2019. Overall, onshore middle distillate inventories were 7.8% lower year on year.
The February crack for 500 ppm Gasoil has improved to $12.20 /bbl with the 10 ppm crack at $ 12.85 / bbl. The regrade is at -$ 2.15 /bbl.
The March crack for 500 ppm Gasoil is at $12.00 /bbl with the 10 ppm crack at $ 12.65 / bbl. The regrade is at -$ 1.50 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO market snapped a five-day losing streak on Thursday, climbing higher against firmer crude prices at the Asian close. The front-month VLSFO crack rose to a four-session high of $19.24 per barrel above Brent crude, compared with a four-month low of $16.42 a barrel it hit in the previous session.
Singapore’s residual fuel oil inventories fell in the week to Feb. 5 amid weak net import volumes, down from a more than seven-month high in the previous week. Stocks fell by 1.87 million barrels from the previous week to a five-week low of 21.685 million barrels, data from Enterprise Singapore showed.
The February 180 cst crack has dropped to -$ 9.85/ bbl with the visco spread at $ 0.75 /bbl.
The March 180 cst crack is at -$ 10.25/ bbl with the visco spread at $ 1.20 /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.