Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Hopes for a consumption ramp-up by Chinese industries and consumers helped global crude prices to rise Monday from the torrid selloff of the previous week as bulls in the space bet the largest oil importer will progress from an end to three years of COVID lockdowns.

London-traded Brent crude for March delivery finished the regular session up $1.05, or 1.3%, at $80.99. Like WTI, the global crude benchmark tumbled 7.5% last week, touching a three-week low of $79.62.

New York-traded WTI crude for March delivery officially settled Monday’s trade up 72 cents, or 1%, at $74.11. WTI plunged 7.5% last week, hitting a three-week low of $73.11, on recession fears and the uncertainty about the direction for U.S. interest rates after huge employment gains among Americans in January again threatened to bump up inflation.

While Monday’s trading was choppy, with WTI and Brent re-entering negative territory at several points during the day, the bet on China seemed to be a decisive factor, especially after the International Energy Agency, or IEA, reiterated its forecast that Chinese demand will help lead to record global oil consumption in 2023.

Speaking on the sidelines of an industry conference in India, IEA executive director Fatih Birol said half of global oil demand growth this year will come from China, where jet fuel demand was surging. Depending on how strong that recovery is, global oil alliance OPEC+ may have to reassess its early October decision to cut output by 2 million barrels per day through 2023, Birol said.

Countering the IEA’s projections on China, DBS Bank’s lead energy analyst Suvro Sakar said higher interest rates in most parts of the world could keep a lid on crude’s gains..

Supply concerns continued to affect markets as operations at Turkey’s oil terminal in Ceyhan halted after a major earthquake hit the region. The BTC terminal, which exports Azeri crude oil to international markets, will be closed on Feb. 6-8 while operators assess earthquake damage, a Turkish shipping agent said.

In U.S. supply, energy firms this week cut the number of oil and natural gas rigs by the most since June 2020, energy services firm Baker Hughes Co said. U.S. oil rigs fell 10 to 599 this week, their lowest since September, while gas rigs dropped by two to 158.

The U.S. Commodity Futures Trading Commission said on Thursday that as a result of the ransomware attack on ION Trading UK, the CFTC’s weekly Commitments of Traders report will be delayed until all trades can be reported. CFTC reports provide a snapshot of investor positioning on various assets, including oil.

Product Data likely to be unavailable till Friday

The March crack is lower at -$3.35 per barrel

Product Data likely to be unavailable till Friday.

The March crack is higher at $15.05 per barrel.

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

Product Data likely to be unavailable till Friday.

The March crack for 10 ppm Gasoil is lower at $23.60 /bbl. The 10 ppm regrade is at -$0.20 /bbl.

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

Product Data likely to be unavailable till Friday

The March crack for 180 cst FO is higher at – $19.85 /bbl with the visco spread at $2.15 /bbl.

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

No fresh trades 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 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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