Oil prices fell on Monday after Saudi Arabia made its deepest monthly price cuts to supply for Asia in five months.
Brent crude fell 65 cents to settle at $42.01 a barrel, while WTI crude fell 67 cents to $39.10 per barrel after hitting $38.55, its lowest since July 10.
Trading was thin due to the Labour Day holiday on Monday in the US.
Saudi Aramco lowered its Oct’20 OSPs for crude supplies to Asia and the US, while raising some prices for grades bound for Northwest Europe and the Mediterranean, the company said in a pricing letter on 5 Sep’20.
At a global level, the death toll from the COVID-19 virus rose to 896,559 (+3,846 DoD) yesterday. The total number of active cases fell by 30,000 to 7,003,926. (Click here for details).
Asia’s naphtha crack eased from a 5-1/2 week high to a two-session low of $80.53 a tonne on muted demand following a string of purchases last week.
The October crack is higher at $ 1.55 / bbl
Asia’s gasoline crack hit a near two-week high of $3.02 a barrel on Monday on active cash trades in Singapore.
The October crack is higher at $ 3.40 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asian refining margins for 10 ppm gasoil climbed on Monday, partly helped by weaker raw material crude prices, but the market for the industrial fuel remains pressured by abundant supplies and lacklustre demand.
Refining profit margins, also known as cracks, for 10 ppm gasoil rose to $3.76 a barrel over Dubai crude during Asian trading hours, compared with $3.46 per barrel on Friday. Cracks for the benchmark gasoil grade in Singapore, which have shed 35% over the last month, remain about 75% lower than the historical average for this time of year.
India’s gasoil exports rose to a three-month high of 2.4 million tonnes in August, while China’s exports soared to a four-month high of 1.71 million tonnes last month.
The Gasoil EFS flipped into positive territory on Monday, technically reversing the arbitrage, although it will not be workable. Cash discounts for 10 ppm gasoil were at 64 cents a barrel to Singapore quotes on Monday.
The October crack for 500 ppm Gasoil is higher at $3.10 /bbl with the 10 ppm crack at $ 3.60 / bbl. The regrade is at -$ 4.45 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s 0.5% VLSFO crack extended its losses on Monday, slipping for a third straight session to a more than two-month low, despite falling crude oil prices. The front-month VLSFO crack against Dubai crude fell to $6.09 a barrel at the end of Asian trading hours, down from $6.22 a barrel in the previous session and its lowest since June 30.
The October crack for 180 cst FO is higher at – $2.55 /bbl with the visco spread at $0.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
We will add one tranche of November Jap Naphtha-Dubai at current levels of $1.10 / bbl
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.