Oil futures on Wednesday clawed back some of the losses they sustained in the previous session, but a rebound in COVID-19 cases in some countries undermined hopes for a steady recovery in global demand.
Brent crude rose $1.01 to settle at $40.79 a barrel, while WTI crude rose $1.29 to settle $38.05 per barrel.
The US EIA on Wednesday cut its 2020 world oil demand growth forecast by 210 KB/D to 8.32 MB/D. In its monthly forecast, the agency cut its oil demand growth estimate for 2021 by 490 KB/D to 6.53 MB/D, on lower expected consumption growth in China.
US crude oil production is expected to fall 870 KB/D to 11.38 MB/D this year, less than the 990 KB/D fall previously forecast, while its petroleum demand is expected to fall 2.12 MB/D to 18.42 MB/D, versus 2 MB/D fall previously forecast, according to the EIA.
India’s fuel demand slipped further in Aug’20 and posted its biggest monthly decline since Apr’20, falling to 14.39 MMT (-16% YoY, -7.5% MoM) as a surge in coronavirus infections continue to throttle economic activity and transportation.
Crude stockpiles burgeoned, arguably due to ships which had been waiting to unload. Gasoline stocks drew considerably while distillate stocks drew against expectations. The official data will be released today.
At a global level, the death toll from the COVID-19 virus rose to 907,304 (+6,227 DoD) yesterday. The total number of active cases was around 12,000 higher at 7,015,799. (Click here for details).
Asia’s naphtha crack was unchanged at $85.60 a tonne on Wednesday as strong demand and tight supplies kept the margin firm.
Light distillates inventories in Fujairah fell by about 18.5%, or close to 1.4 million barrels, to around 6.2 million barrels in the week to Sept. 7, lowest since April 20, according to data from Fujairah Oil Industry Zone published via industry information service S&P Global Platts.
The October crack is higher at $ 2.25 / bbl.
No fresh news on the gasoline markets.
The October crack is lower at $ 3.50 / 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.
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.
Cash discounts for 10 ppm gasoil GO10-SIN-DIF were at 64 cents a barrel to Singapore quotes on Monday.
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 October crack for 500 ppm Gasoil is higher at $3.45 /bbl with the 10 ppm crack at $ 3.95 / bbl. The regrade is at -$ 4.70 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s front-month 380-cst HSFO time-spread sank to a more than two-month low on Wednesday, dragged lower by an absence of demand.
The Oct/Nov 380-cst HSFO time spread fell to minus $2 per tonne, down from minus $1.25 a tonne on Tuesday and its lowest since July 3.
The October crack for 180 cst FO is lower at – $2.65 /bbl with the visco spread at $0.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh transactions 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.