Crude Oil
Oil prices slipped on Thursday as global supply and demand worries erased earlier gains seen from an increase in Saudi Arabia’s official crude selling price.
Brent crude settled at $29.46 /bbl, down 26 cents yesterday. WTI futures lost 44 cents to settle at $23.55 /bbl.
Oil prices were much higher earlier in the day following reports from Saudi Arabia on crude prices and imports and exports in China.
Saudi Arabia’s state oil giant Aramco has raised the Jun’20 price for its Arab light crude oil to Asia by $1.40/bbl from May’20, setting it at a discount of $5.90 to the Oman/Dubai average, according to a document seen by Reuters on Thursday.
In China, meanwhile, oil imports climbed to 10.42 million bpd in April from 9.68 million bpd in March, based on customs data for the first four months of 2020. However, the country’s imports for all goods fell, suggesting any recovery is some way off as economies around the world fall into recession.
US jobless claims continued to rise, although at a slower pace with 3.2 million more people seeking unemployment benefits for the week ended 2 May’20. The latest numbers lifted the total to about 33 million claims since 21 Mar’20.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 270,426 (+5,229 DoD) yesterday, with the total number of confirmed infections at 3,913,644 (+96,262 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack dropped 10% to a two-session low of $23.60 a tonne on Wednesday, dragged down by stronger oil price, high supplies and weak gasoline fundamentals.
The May crack has improved further to -$0.05 / bbl.
The June crack is at -$2.85 / bbl.
Gasoline
Asia’s gasoline remained at a discount to Brent since March this year when the value turned negative for the first time since February 2019. The gasoline crack was a discount of $4.22 a barrel to Brent on Wednesday versus a discount of $4.33 the previous day.
Singapore’s onshore light distillates stocks rose by 727 KB barrels, to a three-week high of 16.3 million barrels in the week to Tuesday, data from Enterprise Singapore showed.
The May crack has jumped sharply to $0.85 /bbl
The June crack is at -$0.20 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10 ppm gasoil were at $1.49 per barrel to Singapore quotes on Wednesday, 3 cents wider from Tuesday.
Cash discounts for jet fuel narrowed to $3.58 a barrel to Singapore quotes, compared with $4.29 per barrel on Tuesday.
Singapore onshore middle distillate stocks dropped 5.9% to 14 million barrels in the week ended May 5, Enterprise Singapore data showed. Weekly middle distillate inventories have averaged at 12.1 million barrels so far in 2020, compared with 11.1 million barrels in 2019. Overall, onshore middle distillate inventories were 45.7% higher year-on-year.
The May crack for 500 ppm Gasoil is lower at $2.75 /bbl with the 10 ppm crack at $ 4.95 / bbl. The regrade is at -$ 7.30 /bbl.
The June crack for 500 ppm Gasoil is at $1.60 /bbl with the 10 ppm crack at $ 3.40 / bbl. The regrade is at -$ 5.75 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO firmed on Wednesday as time spreads and cash premiums of the fuel narrowed their discounts. Despite an absence of buying interest in the Singapore trading window, cash discounts for VLSFO cargoes were at minus $8.31 a tonne to Singapore quotes, their narrowest in more than three weeks. VLSFO front-month time spreads were also at their narrowest in over six weeks at minus $6.75 a tonne.
Singapore fuel oil stocks jumped by 1.932 million barrels from the previous week to 24.14 million barrels in the week to May 5, data from Enterprise Singapore showed. Weekly fuel oil inventories in Singapore were 9% lower than year-ago levels.
The May crack for 180 cst FO is lower at -$3.50 /bbl with the visco spread at $0.95 /bbl.
The June crack for 180 cst FO is at -$4.45 /bbl with the visco spread at $1.15 /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 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.