Crude Oil
Oil prices rose about 1% on Friday as an increase in U.S. jobs eased some financial market concerns that a slowing global economy could dent oil demand. WTI crude settled at $52.81 a barrel, up 36 cents. Brent crude settled up 66 cents at $58.37 a barrel.
Brent futures fell 5.7% for the week, its biggest weekly drop since July. WTI lost 5.5% for the week, also its steepest fall since July.
U.S. job growth increased moderately in September, with the unemployment rate dropping to near a 50-year low of 3.5%, according to a U.S. Labor Department report. The report, however, came on the heels of a string of weak economic reports, including a plunge in manufacturing activity to more than a 10-year low in September and a sharp slowdown in services industry growth to levels last seen in 2016.
On the supply side, Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, said Thursday the world’s top crude oil exporter had fully restored oil output after attacks on its facilities last month knocked out more than 5% of global oil supply.
Investors are also watching for further developments on tensions between the United States and Iran. France said Iran and the United States have one month to get to the negotiating table, suggesting that Tehran’s plan to increase its nuclear activities in November would spark renewed tension in the region.
Drillers cut 3 oil rigs in the week to Oct. 4, bringing the total count down to 710, the lowest since May 2017.
Money managers cut their net long U.S. crude futures and options positions in the week to Oct. 1, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. The speculator group cut its combined futures and options position in New York and London by 64,471 contracts to 148,090 during the period.
Naphtha
Asia’s naphtha inter month time spread hit a fresh five-year high with prices for second-half November rising to $19 a tonne higher than the following month. This is the highest inter month price gap since May 23 2014, and the value is almost six times higher versus an average of $3.3 for the first eight months of this year.
China’s CNOOC was looking to buy up to 80,000 tonnes of naphtha for second-half November arrival at Huizhou. The tender results were not immediately clear but industry sources expect CNOOC to pay premiums in the low to mid $20s a tonne level to Japan quotes on a cost-and-freight (C&F) basis although this could not be directly confirmed.
The October crack is higher at – $ 4.40 / bbl.
Gasoline
Asia’s gasoline crack touched a 13-month high of $10.75 a barrel, supported by supply tightness caused by demand and refinery maintenance.
ARA gasoline stocks fell by 72 KT to 914 KT in th week ended October 3.
The October crack is higher at $ 9.05 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s 10ppm gasoil cash premium to Singapore quotes rose to an almost one year high of 80 cents a barrel on Friday as supplies tightened due to refinery maintenance which came at a time when buying interest for the fuel is strong.
ARA gasoil stocks had edged down by 1.36% to reach a two-week low of 2.755 million tonnes in the week to Thursday.
In addition, refineries in maintenance or going into turnaround mode would disrupt production.
The October crack for 500 ppm Gasoil is lower at $ 16.55 /bbl with the 10 ppm crack at $ 17.55 / bbl. The regrade is at + $ 0.35 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash premiums for Asia’s 380-cst HSFO fell to near six-week lows on Friday, as weak buying interest weighed on prices amid an expected gradual decline in demand for high-sulphur bunkers ahead of the 2020 sulphur cap.
380-cst cash premiums fell to $29.19 per tonne above Singapore quotes, down from $37.93 per tonne in the previous session and down from $50.06 a tonne on Monday. Demand for HSFO bunkers is on the decline as ship operators in the Singapore bunkering hub have already began minimising purchases ahead the 2020 deadline, while others are already testing low-sulphur marine fuels on board at some of their vessels.
Reflecting weaker demand sentiment, backwardation in the front-month Nov/Dec 380-cst time spread also narrowed to a one-month low premium of $23 a tonne on Friday.
ARA Fuel oil stocks shrank by 183 KT to 1.15 million tonnes.
The October 180 cst crack is lower at -$ 12.45 / 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 for today.
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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.