Crude Oil
Oil futures were steady on Thursday after several days of extremely strong and volatile moves. Brent futures fell 5 cents to settle at $65.37 a barrel. WTI crude fell 5 cents to settle at $59.56 per barrel, its lowest close since Dec. 12.
During European trading hours Iranian media carried reports of military commanders speaking of further action aimed at expelling U.S. troops from the region.
The US House of Representatives passed a resolution on Thursday to stop the US President from further military action against Iran, rebuking the president days after he ordered a drone strike that killed a top Iranian commander and raised fears of war.
VLSFO lately has started to trade at levels comparable to marine gasoil, a sign of increasing worry there is not enough of the fuel to comply with new global shipping laws that took effect this year, market participants said.
Naphtha
Asia’s naphtha refining margin rose 5.8% to $79.33 a tonne on Thursday, its highest since Jan. 3, boosted by a rise in demand this week.
South Korea’s Lotte Chem bought naphtha for arrival in the second half of February at Daesan and Yeosu at premiums of about $17.50 and $17.00 a tonne respectively to Japan quotes on a C&F basis. The purchase came in the same week that Hanwha Total and YNCC also bought naphtha for second-half February delivery. Japan’s Asahi Kasei has also bought naphtha for second-half February delivery, but further details were not immediately available.
The January crack is higher at – $ 4.25 / bbl.
Gasoline
No fresh news on the gasoline market. Light Distillate stocks in Skngare rose by 466 kb to 12.06 million barrels
The January crack is higher at $ 4.30 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10 ppm gasoil were at 36 cents per barrel over Singapore quotes on Thursday, as against a 39-cent premium in the previous session.
Cash differentials for jet fuel were at a discount of 11 cents per barrel to Singapore quotes, compared with a premium of 4 cents per barrel in the previous session.
Global air cargo demand fell in November 2019 compared to the year-ago period, recording the 13th straight month of year-on-year declines in freight volumes, the International Air Transport Association (IATA) said in statement on Wednesday.
The January/February time spread for the aviation fuel in Singapore narrowed to trade at a premium of 5 cents a barrel on Thursday, from 14 cents in the day earlier.
Middle Distillate stocks in Singapore dropped by 1148 kb to 9.65 million barrels.
The January crack for 500 ppm Gasoil has dropped to $ 12.45 /bbl with the 10 ppm crack at $ 13.25 / bbl. The regrade is at -$ 0.80 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The cash premium for 380-cst HSFO fell to $15.52 per tonne to Singapore quotes on Thursday, compared with $19.50 per tonne a day earlier.
The 380-cst barge crack to Brent crude for February narrowed to a discount of minus $22.32 a barrel on Thursday, from minus $23.18 on Wednesday.
HSFO refining margins are getting some support from shipowners, who have fitted their vessels with sulphur-cleaning devices, and pockets of demand from refining and power generation.
Meanwhile, the front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) rose to $28.31 a barrel above Brent crude, up from $27.71 a barrel on Wednesday.
The January/February time spread traded at a premium of $16 per tonne on Wednesday, compared with $17.50 a day earlier.
The front-month VLSFO crack dropped $1.06 to $27.71 per barrel above Brent crude during Asian trade on Wednesday, but still within close sight of a record high of $29.35 per barrel hit last week.
Meanwhile, the 380-cst barge crack to Brent crude for February narrowed its discount to minus $23.94 per barrel on Wednesday, from minus $25.71 on Tuesday.
Fuel Oil stocks in Singapore rose by 1427 kb to 21.90 million barrels.
The January 180 cst crack has strengthened further to -$ 11.75 / bbl with the visco spread at $ 2.05 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action for 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 refiner.
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.