Crude Oil
Oil settled higher on Monday.
Brent crude settled up 59 cents at $44.99 a barrel, while WTI rose 72 cents to $41.94 per barrel.
The talks between Democrats and the Trump administration broke down last week.
China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed toward pre-pandemic levels.
OPEC’s 13 countries produced 23.39 MB/D of crude oil in Jul’20, a S&P Global Platts survey found, up 1.08 MB/D MoM. The 10 members with quotas under the OPEC+ accord achieved 94% compliance with their committed production cuts.
Iraq said on Friday it would cut its oil output by a further 400 kbpd in August and September to compensate for its overproduction in the past three months to help it comply with its share of cuts by the OPEC+ group.
Since 1 Aug’20, US energy companies have taken back 2.2 MB of the 23 million barrels they agreed to store in the US SPR, from Apr-Jun’20, according to the US DoE. The companies have until 31 Mar’21 to take back the oil.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 737,912 (+4,354 DoD) yesterday, with the total number of confirmed infections at 20,240,311 (+211,118 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack edged up to a two-session high of $55.83 a tonne .
However, the intermonth spread, at parity, fell to its lowest since May in response to weaker fundamentals. The intermonth spread was at $2 a tonne on Friday.
The September crack is higher at -$0.15 /bbl.
Gasoline
Asia’s gasoline margin rose for a fourth straight day on Friday to hit a three-week high of $1.93 a barrel as inventories fell in Singapore and Europe although stocks were high in the United States. A
The September crack is higher at $3.20 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10 ppm sulphur content slipped to 4 cents a barrel to Singapore quotes on Friday, down from 11 cents a day earlier.
The gasoil EFS traded around minus $11 per tonne on Friday; typically making it unworkable for arbitrage shipments.
China’s gasoil exports this month are expected to be around 1.5 million tonnes, compared with 1.25 million tonnes in July.
The September crack for 500 ppm Gasoil is lower at $4.90 /bbl with the 10 ppm crack at $ 5.70 / bbl. The regrade is at -$ 4.50 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO market dropped on Friday as concerns of continued weak demand and ample supplies weighed on cash differentials and time spreads of the fuel.
Lower deal values in the Singapore trading window pulled the VLSFO cash discount to a more than one-month low of $3 per tonne below Singapore quotes, down from minus $1.13 per tonne in the previous session.
Similarly, the prompt month Aug/Sept time spread dropped to a $4.50 per tonne discount on Friday, its lowest in nearly two weeks and down from $2.50 a tonne in the previous session.
The September crack for 180 cst FO is lower at – $3.20 /bbl with the visco spread at $0.85 /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.