Crude Oil
Oil settled below $40 a barrel on Friday as rising global coronavirus cases stoked fears about lackluster demand.
Brents future dropped $1.48 to settle at $39.45 a barrel. WTI crude futures fell $1.65 to $37.14 per barrel.
Both contracts gained on the week with Brent up 5.8%, and U.S. crude rising 4.3%.
Libya is producing more than 1 MB/D of oil, an increase of almost 500 KB/D in just over two weeks, after its two rival-warring factions agreed to a peace deal on 23 Oct’20, state-owned NOC said 7 Nov’20.
US oil refiners are expected to have 4.2 MB/D of capacity offline for the week ending 6 Nov’20, increasing available refining capacity by about 163 KB/D WoW. Offline capacity is expected to decline to 3.9 MB/D in the week to 13 Nov’20, according to IIR.
China’s crude oil imports slipped 12.2% MoM in Oct’20 to 42.56 MMT, as refiners hit the brakes after months of a buying frenzy that had raised crude inventory to a near-full level, and as independent refineries run out of import quotas.
US energy firms added 5 oil rigs in the week to 6 Nov’20 to total 226 (-458 YoY), according to Baker Hughes, as producers keep returning to the wellpad after crude prices held around $40/bbl from mid Jun’20-late Oct’20.
Money managers cut their net long US crude futures and options positions by 36,699 contracts to total 251,024, in the week to 3 Nov’20, the US CFTC said on Friday.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,255,906 (+5,839 DoD) yesterday. The total number of active cases rose by around 545,000 over the weekend to 13.67 million. (Click here for details).
Naphtha
Asia’s naphtha crack extended losses to a more than one-week low of $63.08 a tonne, down from $65.08 a tonne in the previous session as ample supplies weighed.
The November crack is lower at $ 0.70 /bbl. The December crack is at $1.15 /bbl.
Gasoline
Asia’s gasoline crack hit a one-week high of $2.76 a barrel on Friday, supported by signs of shrinking inventories amid refinery run cuts.
The November crack is higher at $ 2.80 /bbl. The December crack is at $2.85 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian refining margins for jet fuel rose to their strongest level in more than four months on Friday.Cash differentials for the aviation fuel firmed to their smallest discounts since early June helped by firmer demand and a drop in regional supplies.
Refining margins for jet fuel in Singapore climbed 3 cents to $2.81 per barrel over Dubai crude during Asian trading hours on Friday, a level not seen since June 22. The cracks have doubled this week, posting their second consecutive weekly rise.
Cash discounts for jet fuel were at 22 cents a barrel to Singapore quotes, the smallest discounts since June 4. They were at a discount of 31 cents per barrel a day earlier.
The front-month time spread for jet fuel narrowed its contango structure on Friday to trade at a discount of 35 cents per barrel, compared with minus 40 cents a day earlier. The jet fuel market in Asia was also drawing support from improving air freight demand and seasonal heating demand for closely-related kerosene, ahead of peak winter months in Japan and South Korea.
The November crack for 500 ppm Gasoil is lower at $3.05 /bbl with the 10 ppm crack at $ 3.85 / bbl. The regrade is at -$ 0.60 /bbl.
The December crack for 500 ppm Gasoil is at $3.45 /bbl with the 10 ppm crack at $ 4.25 / bbl. The regrade is at -$ 0.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month HSFO viscosity spread fell to more than one-month low on Friday amid growing buying interest for cargoes of 380-cst HSFO with only a few suppliers. Demand for 180-cst HSFO has also waned, further pressuring the viscosity spread.
The front-month viscosity spread fell to $5.50 per tonne on Friday, down 25 cents from the previous session, and its lowest since Sept. 23.
The November crack for 180 cst FO is steady at $0.30 /bbl with the visco spread at $0.65 /bbl.
The December crack for 180 cst FO is at -$0.25 /bbl with the visco spread at $0.90 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh activity 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.