Oil clawed back Thursday’s early losses and a chunk of the previous session’s slide on a report that the U.S. government was not planning to sell crude from its emergency reserves nor ban exports of the commodity to contain runaway fuel prices and inflation.
Brent crude finished up 87 cents, or 1.1%, at $81.95 per barrel. WTI crude settled up 87 cents, or 1.1%, at $78.30 per barrel. Both contracts were on track to jump 4% this week
“Oil prices lifted after the U.S Energy Department said it has no plan ‘at this time’ to tap into U.S. strategic oil reserves to cool the rally in oil prices,” Commonwealth Bank analyst Vivek Dhar said in a note. However a U.S. Department of Energy source told Reuters that a social media post by a Bloomberg reporter which said the department was not considering tapping into the SPR “at this time” was not accurate.
Asia’s naphtha crack slipped to $134.73 per tonne from $136.48 in the last session. The prompt inter-month spread increased to $4.00/MT.
“Naphtha fundamentals faced some headwind due to energy crunch in China which might have an effect on petrochemical prices as factories in various sectors in China have been forced to shut or reduce production as part of Chinese government’s energy control policy,” Refinitiv Oil Research said in a report.
On the supply side, Middle Eastern naphtha exports have reached 1.2 million barrels per day in September. The volume is up by about 80,000 barrels per day from August and marks the highest level since September 2018, according to data from consultancy Vortexa.
The October crack is higher at $3.25 / bbl.
The November crack is at $4.05 / bbl.
Asia’s gasoline crack gave up some gains on Thursday as U.S. demand slowed but the downside remained limited after stocks at Singapore plunged to a more than 11-month low.
The crack eased to $8.83 a barrel from $9.13 on the previous day. In physical markets, there were two deals for the 95-octane grade, and one for the benchmark grade.
Singapore inventories of light distillates dropped 217,000 barrels to more than 11-month low of 11.63 million barrels in the week to Oct. 6, Enterprise Singapore data showed.
The October crack is lower at $10.60 / bbl.
The November crack is at $10.15 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asian refining margins for 10 ppm gasoil climbed for a sixth consecutive session on Wednesday, soaring to their highest level since January 2020, buoyed by steady demand amid tighter regional supplies.
Asia’s cash differentials for 10ppm rose by 2 cents to a premium of 29 cents per barrel on Wednesday
Refining margins for 10ppm gasoil were at $13.52 per barrel over Dubai crude on Thursday, lingering near multi-month highs, while some traders were expecting the industrial fuel to outperform other refined products in the run-up to year-end.
Asia’s cash differentials for jet fuel were at a discount of 13 cents per barrel to Singapore quotes on Wednesday, compared with a discount of 3 cents per barrel a day earlier.
Asian jet fuel refining margins slipped on Thursday, but stayed within close sight of a multi-month high touched in the previous session, buoyed by pockets of aviation demand emerging from some domestic flight routes in the region.
Refining profit margins or cracks for jet fuel were at $11.48 per barrel over Dubai crude during Asian trading hours, down from Wednesday’s $13.50 a barrel that was the highest since January 2020.
“Jet demand is driven by an increase in flight capacities in Asia and higher demand for kerosene for winter heating,” said Daphne Ho, senior analyst at Wood Mackenzie.
Singapore’s middle distillate inventories slipped 1.3% to a four-week low of 10.4 million barrels in the week to Oct. 6, according to Enterprise Singapore data. This week’s stocks were 30% lower than a year earlier.
The October crack for 500 ppm Gasoil is higher at $11.55 /bbl with the 10 ppm crack at $ 13.75 /bbl. The regrade is at -$ 0.40 /bbl.
The November crack for 500 ppm Gasoil is at $12.30 /bbl with the 10 ppm crack at $ 14.30 /bbl. The regrade is at -$ 0.10 /bbl. This is the first time we are seeing the regrade in the positive range.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack extended gains on Thursday, recovering from a more than four-month low earlier in the week, as benchmark crude oil prices plummeted.
The front-month VLSFO crack climbed to a near two-week high of $11.92 a barrel above Dubai crude, up from a more than four month low of $10.56 on Tuesday, Refinitiv Eikon data showed.
In the high-sulphur fuel oil (HSFO) market, cash premiums for 180-cst HSFO fell to a more than six-week low of $7.33 a tonne to Singapore quotes.
Singapore fuel oil stocks rose by 2.06 million barrels, or about 324,000 tonnes, to 20.79 million barrels, or 3.27 million tonnes, according to Enterprise Singapore data. Ffuel stocks were still 14% lower from year-ago levels
The October crack for 180 cst FO is lower at -$0.60 /bbl with the visco spread at $2.10 /bbl.
The November crack for 180 cst FO is at -$0.80 /bbl with the visco spread at $2.05 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
We shall hedge Nov and Dec Jap-Nap Dubai at $4.05 and $4.20 per barrel. respectively
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.