Crude Oil
Oil futures ended largely steady on Monday as positive economic data supported prices.
Brent crude rose 30 cents to settle at $43.10 a barrel. U.S. crude fell 2 cents to settle at $40.63 a barrel.
U.S. services industry activity rebounded sharply in June, almost returning to its pre-COVID-19 pandemic levels. German data, however, showed that the recovery from COVID-19 will be slow and painful.
Saudi Arabia’s state oil producer Aramco has increased official selling prices (OSPs) for its crude to Asia by $1 a barrel in August, and raised the OSPs for almost all grades to Europe and the United States.
Hedge funds and other money managers raised their net long US crude futures and options positions by 251 contracts to 378,951 in the week ending 30 Jun’20, the US CFTC said on Monday.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 540,137 (+3,583 DoD) yesterday, with the total number of confirmed infections at 11,732,996 (+171,508 DoD). (Click here for details).
In the first five days of July, 16 states reported record increases in new cases of COVID-19, which has infected nearly 3 million Americans and killed more than 130,000.
Naphtha
Asia’s naphtha crack rose to a near five-month high of $94.25 a tonne on Monday, boosted by strong demand at a time when fewer cargoes are arriving from the West due to refinery run cuts. The strong fundamentals have driven spot prices to their highest in more than three months.
The August crack is higher at $ 0.60 /bbl
Gasoline
Asia’s gasoline crack was at a three-session high of $2.10 a barrel premium over Brent.
ARA gasoline stocks fell by almost 9% in the week to Thursday.
The August crack is lower at $2.90 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash discounts for jet fuel narrowed on Monday. Cash differentials for jet fuel in Singapore were at a discount of 44 cents a barrel to Singapore quotes on Monday, compared with a 55-cent discount on Friday.
The regrade for August stood at a discount of $4.30 a barrel on Monday, prompting refiners to continue minimizing jet fuel production.
Cash premiums for 10-ppm gasoil were at 62 cents a barrel to Singapore quotes on Monday, down from 67 cents per barrel on Friday..
The August crack for 500 ppm Gasoil is higher at $6.15 /bbl with the 10 ppm crack at $ 6.95 / bbl. The regrade is at -$ 4.10 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Physical trade activity for cargoes of fuel oil in the Singapore window was active on Monday, extending a buying frenzy that kicked off on July 1, pushing HSFO cash differentials higher while widening the front-month viscosity trade.
Cash discounts for 180-cst HSFO cargoes climbed to a three-week high of minus $2.50 a tonne to Singapore quotes, while discounts for 380-cst HSFO cargoes were at minus 21 cents a tonne, their narrowest since March 24.
The front-month viscosity spread climbed 50 cents to a three-session high of $6.50 a tonne.
The August crack for 180 cst FO is higher at – $3.10 /bbl with the visco spread at $0.95 /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.