Crude Oil
Oil prices rose on Tuesday for their seventh straight session of gains, touching 13-month highs as investors kept betting that fuel demand will rise while OPEC and allied producers keep a lid on supply.
Brent settled up 53 cents, or 0.9%, to $61.06 a barrel. WTI crude for March was at $58.36 a barrel, up 39 cents or 0.7%.
India’s fuel consumption in Jan’21 registered its first MoM decline in five months, falling to 18.01 MMT (-3.2% MoM, -3.9% YoY), as an uptick in global oil prices posed a roadblock to a gradual recovery in demand, according to the PPAC.
api data
The API reported a surprise draw in crude stocks yesterday. We, along with the rest of the industry, expected a build in stocks. However, gasoline stocks continued to build strongly and could provide a dampener to the momentum driven rally.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,349,102 (+14,559 DoD) yesterday. The total number of active cases fell by around 80,000 DoD to 25.60 million. We have seen the number of active cases falling steadily for the last week or so. We hope this continues. (Click here for details)
Naphtha
Asia’s naphtha crack inched lower on Tuesday, but still lingered close to its strongest levels in three weeks, thanks to tighter supplies and firmer demand for petrochemicals.
The naphtha crack NAF-SIN-CRK dipped to $107.15 per tonne from $108.88 per tonne on Monday. It has surged about 77% in the last two months.
Naphtha flows into Asia this month were provisionally estimated around 5.6 million tonnes, down from January’s flows of 6.2-6.3 million tonnes, Refinitiv oil research assessments showed.
The February crack is lower at $1.00 /bbl.
The March crack is at $0.65/bbl
Gasoline
Asia’s gasoline crack eased to $4.12 per barrel on Tuesday, down from Monday’s $4.74 a barrel.
The gasoline crack has gained 16% in the past month, and market watchers expect demand for the transportation fuel to pick up pace as countries ease mobility restrictons further in coming days.
The February crack is lower at $4.60 /bbl.
The March crack is at $5.05 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Gasoil with 10 ppm sulphur content was at a discount of 4 cents a barrel to Singapore quotes, compared with a 5-cent discount on Monday.
Cash discounts for jet fuel narrowed to 12 cents per barrel to Singapore quotes on Tuesday, compared with a discount of 16 cents per barrel a day earlier.
The Feb/March time spread for the aviation fuel in Singapore narrowed its contango to trade at a discount of 24 cents per barrel, Refinitiv Eikon data showed.
Global scheduled flight seats improved for a second consecutive week to be 49.3% down year-on-year in the week ended Monday, compared with a 49.9% drop in the preceding week, according to aviation data firm OAG.
The February crack for 500 ppm Gasoil is lower at $5.85 /bbl with the 10 ppm crack at $ 6.95 / bbl. The regrade is at -$ 1.90 /bbl.
The March crack for 500 ppm Gasoil at $5.90 /bbl with the 10 ppm crack at $ 7.10 / bbl. The regrade is at -$ 1.50 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% very low-sulphur fuel oil (VLSFO) refining margin broadened its gains on Tuesday, climbing for a fourth session straight, as it persistently defied similarly sharp gains in crude oil prices.
The VLSFO market has soared in recent weeks, boosted by tightening fuel supplies amid limited refinery output and lower arbitrage inflows as well as firm bunkering demand so far, trade sources said.
The strength in the low-sulphur market and the relative weakness of high-sulphur fuel oil (HSFO) have also pushed the front-month VLSFO-HSFO price differential, also known as the HiLo spread, to an 11-month high of $115 a tonne, according to Refinitiv data in Eikon. The widening HiLo price differential is expected to boost demand for scrubber-fitted ships over the near-term, though on the other hand, HSFO may be boosted by tightening supply of heavy crudes as Saudi Arabia follows through with supply cuts in February and March, the sources said.
The January crack for 180 cst FO is higher at -$2.95 /bbl with the visco spread at $1.10 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action 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.