Crude Oil
Uncertainty continued to dog the oil markets as it struggled to come to terms with patent lack of demand and upcoming vaccine results.
Brent crude settled 2 cents higher at $48.81 per barrel. WTI futures fell 8 cents to settle at $45.52 a barrel.
Prices fell 1% early in the session as U.S. crude inventories rose by 15.2 million barrels to 503.2 million barrels last week, according to the Energy Information Administration.
Libyan crude and condensate exports are poised to jump to a 13-month high of 1.24 MB/D this month, according to S&P Global Platts estimates compiled using data from shipping and trading sources.
Egypt has almost doubled its oil hedges during the 2020-21 fiscal year ending in Jun’20, Bloomberg reported on Wednesday.The has bought more derivative contracts to protect itself against a rise in oil costs.
doe data
There were huge stock builds across the board in arguably one of the most bearish stock reports in the recent past.
U.S. net imports of crude oil rose by 2.7 million barrels per day last week, the biggest increase on record, as exports plunged. Not even an increase in run rates from 78.2 to 79.9% could help much. The increase in run rates, though, helped to boost gasoline and distillate stockpiles, even though our material balance statement says this build should be lower.
The material balance report, for a change shows crude stocks building nearly in synch with the number reported. Product stock builds are possibly overstated. However, the drop in product demand is alarming. Gasoline and Distillate demands both dropped by close to 400 kbpd. This is not very supportive for the markets.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,574,821 (+12,260 DoD) yesterday. The total number of active cases rose by around 130,000 DoD to 19.67 million. (Click here for details).
Naphtha
Asia’s naphtha crack rose to a near five-week high of $60.58 a tonne on Wednesday on firm demand this week.
The January crack is higher at + $0.35 /bbl.
Gasoline
Asia’s gasoline crack was at a one-week high of $1.51 a barrel but this was still 40.5% lower versus a month ago.
Light-distillate inventories in Fujairah were up 3.3% to 6.8 million barrels in the week ended Dec. 7, data via S&P Global Platts showed. Japanese gasoline inventories were also higher week-on-week.
The January crack is higher at $3.25 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for jet fuel widened to 21 cents a barrel to Singapore quotes on Wednesday, compared with a 2-cent discount a day earlier.
Refining profit margins for jet fuel dipped 4 cents to $4.90 per barrel over Dubai crude during Asian trading hours.
Middle-distillate inventories in Fujairah climbed 12.8% to 6.1 million barrels in the week ended Dec. 7, data via S&P Global Platts showed.
The January crack for 500 ppm Gasoil is lower at $4.65 /bbl with the 10 ppm crack at $ 5.50 / 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 0.5% VLSFO crack on Wednesday slipped to a three session low of $9.77 a barrel above Dubai crude prices, while the front-month contango dropped to its widest discount in over two months.
The Jan/Feb VLSFO time spread fell to minus 75 cents per tonne, down from minus 25 cents in the previous session and its lowest since Sept. 16.
Fuel oil inventories in Fujairah rose by 1.592 million barrels (19%) from the previous week to 10.207 million barrels data via S&P Global Platts showed. However, Fujairah’s fuel oil inventories were 17% lower than year-ago levels.
The January crack for 180 cst FO is lower at -$2.15 /bbl with the visco spread at $0.85 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
We will hedge the February Jap-Nap – Dubai crack at today’s levels of $ 0.45 /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.