Brent crude finally surged past $ 50 /bbl as speculators bet on the vaccine being effective and demand picking up fast.
Brent crude settled $ 1.39 higher at $50.25 per barrel. WTI futures rose $1.26 to settle at $46.78 a barrel.
Both benchmarks reached their highest levels since March, with the contracts posting session highs of $51.06 a barrel and $47.74 a barrel, respectively. However, their relative strength indexes showed both had moved into overbought territory. Technical levels aside, we would do well to remember that demand faltered at these levels even before the Covid-19 pandemic. We cannot see demand being anywhere near these levels any time in the near future.
India’s top oil refiner, IOC, operated at 100% full capacity for the first time in Nov’20 since Feb’20 to meet rising local fuel demand according to its statement.
At a global level, the death toll from the COVID-19 virus rose to 1,587,608 (+12,669 DoD) yesterday. The total number of active cases rose by around 310,000 DoD to 19.98 million. (Click here for details).
Asia’s naphtha crack hit a five-week high of $66.88 a tonne on Thursday on the back of strong demand.
The January crack is lower at + $0.20 /bbl.
Singapore’s light distillates inventories rose 223,000 barrels to reach a two-week high of 12.4 million barrels in the week to Dec. 9, data from Enterprise Singapore showed.
The January crack is steady at $3.25 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash discounts for gasoil with 10 ppm sulphur content narrowed to 8 cents a barrel to Singapore quotes, the smallest discounts since the differentials plunged to a negative territory on Aug. 11.
The December-January time spread for 10 ppm gasoil in Singapore remained unchanged at zero for a second straight session.
Singapore’s middle distillate inventories fell 5.2% to 15.05 million barrels in the week to Dec. 9, according to Enterprise Singapore data. Weekly Singapore middle distillate inventories have averaged about 13.8 million barrels so far in 2020. This week’s stocks were 40.5% higher from a year ago.
The January crack for 500 ppm Gasoil is higher at $4.75 /bbl with the 10 ppm crack at $ 5.60 / bbl. The regrade is at -$ 0.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s 0.5% VLSFO cash premiums fell to near three-month low of 26 cents a tonne on Thursday, down from 97 cents in the previous session and the lowest since Sept. 23.
Singapore’s residual fuel oil inventories dropped to a three-week low in the week to Dec. 9, falling 13% from the previous week despite firm net import volumes. Onshore fuel oil stocks plummeted by 3.39 million barrels to 22.361 million barrels according to the Enterprise Singapore data. However, residual fuel stocks were up 5% from a year earlier.
The January crack for 180 cst FO is lower at -$2.65 /bbl with the visco spread at $0.85 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
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.
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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.