Crude Oil
Oil slumped on Tuesday as investors also grew cautious over expectations that the world’s biggest producers would quickly agree on output cuts..
Brent crude futures fell $ 1.18 to settle at $ 31.87 /bbl. WTI futures fell $2.45 to $23.63 a barrel.
U.S. President Donald Trump on Monday said OPEC had not asked him to push domestic oil producers to cut production to buttress prices. He also said U.S. output was already declining in response to falling prices. On Tuesday, the U.S. Department of Energy, noting new monthly forecasts, pointed out that production is already dropping without government involvement.
U.S. crude production is expected to fall by 470,000 barrels per day (bpd) and demand is set to drop by about 1.3 million bpd in 2020, the U.S. Energy Information Administration (EIA) said.
Republican US senators have introduced a bill that would remove US defense systems and troops in Saudi Arabia unless it cuts oil output.
Bargain-hunting Chinese buyers have snapped up very cheap and sometimes obscure crude oil grades. North Sea grades purchased included Balder, Flotta and Chestnut crude, while Guyana’s Liza crude was sold into China for the first time.
Japan’s core machinery orders unexpectedly rose 2.3% MoM in Feb’20, suggesting business investment remained resilient even as companies braced for a major jolt to demand from the coronavirus pandemic.
api changes
Data from the API showed crude stocks surged last week to 473.8 million barrels. Distillate stocks still declined albeit less than market expectations. We await the official data today.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 82,080 74,702 (+7,378 DoD) yesterday, with the total number of confirmed infections at 1,431,706 (+84,532 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack persisted at a discount to Brent crude for the fifth straight session on Tuesday, this time falling by 23% from the previous session to stay near a 12-year low of minus $59.83 a tonne as high supplies dragged.
The May crack has stayed at -$9.70 / bbl.
Gasoline
Asia’s gasoline crack recovered 4% to a discount of $10.51 a barrel to Brent crude after sinking to its lowest level since September 2008.
The May crack has dropped to -$8.75 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for jet fuel narrowed to $2.90 per barrel to Singapore quotes on Tuesday, compared with Monday’s discount of $3.07 per barrel, a level not seen since August 2008.
Cash discounts for 10 ppm gasoil widened to $1.55 per barrel to Singapore quotes on Monday, the biggest discounts since Singapore’s benchmark was shifted to 10ppm gasoil in January 2018, from 500ppm earlier. They were at a discount of $1.36 a barrel on Monday.
Refining margins jet fuel were at $3.01 a barrel below Dubai crude on Tuesday, compared with minus $1.15 a barrel on Monday.
Cash discounts for 10 ppm gasoil widened to $1.36 per barrel to Singapore quotes on Monday, the biggest discounts since Singapore’s benchmark was shifted to 10ppm gasoil in January 2018. They were at a discount of $1.12 a barrel on Friday.
The May crack for 500 ppm Gasoil has sunk to $4.30 /bbl with the 10 ppm crack at $ 6.65 / bbl. The regrade is at -$ 6.50 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO cash differential extended gains on Tuesday, helped by slightly firmer deal values even as demand for marine fuel remained weak amid ample supply.
The VLSFO cash discount firmed to minus $6.84 a tonne to Singapore quotes on Monday, up from minus $7.89 a tonne in the previous session and Friday’s record low of minus $10.09 a tonne.
The May crack for 180 cst FO has improved to -$2.70 /bbl with the visco spread at $1.05 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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.
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.