Crude prices settled mixed after the Federal Reserve raised warning flags on inflation fears.
Brent crude futures settled settled down 14 cents, or 0.2%, at $91.41. Brent rallied to as high as $93.06 earlier.
WTI crude futures settled up just 22 cents, or 0.3%, at $89.88 per barrel. WTI rallied more than $2 earlier in the day, reaching a session peak of $92.74 earlier.
The January reading for the U.S. Consumer Price Index showing new highs since 1982. This led the St. Louis Fed President James Bullard call for a 100-basis point hike by July, if the central bank doesn’t succeed in making a ding on inflation running at 40-year highs. That a voting member of the Fed’s Federal Open Market Committee would push for an increase double than telegraphed to markets was unnerving enough to Wall Street that it reversed a 1% rally on the S&P 500 from earlier in the day, sending it down 1% instead.
At a global level, the death toll from the COVID-19 virus rose to 5.81 Million (+10,862 DoD) yesterday. The number of daily deaths crossed 10,000 after a very long period. The total number of active cases fell marginally by 14,000 DoD to 74.37 million. (Click here for details).
Asia’s naphtha crack rose to $167.35 a tonne, up $8.50 from last close.
The March crack is unchanged at $2.65 per barrel.
Asia’s gasoline crack climbed to its highest level since November after inventories plunged. The refining profit margin rose to $14.50 a barrel, up 97 cents from the last close. In physical markets, Vitol purchased a cargo of the benchmark 92-octane motor fuel.
Singapore onshore inventory of light distillates declined by 1.428 million barrels to 14.302 million barrels in the week to Feb. 9, data from Enterprise Singapore showed.
The March crack is higher at 17.45/bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s cash premiums for 10 ppm gasoil inched lower on Thursday, but stayed near a multi-year high touched in the previous session amid limited supplies. Cash premiums for gasoil with 10 ppm sulphur content, which have surged nearly 40% in the last two weeks, were at $1.93 a barrel to Singapore quotes on Thursday. The differentials hit $2.07 per barrel on Wednesday, a level not seen since October 2017.
Refining margins, or cracks, for 10 ppm gasoil climbed to $17.77 a barrel over Dubai crude during Asian trading hours, up from $16.52 per barrel a day earlier.
Singapore’s middle distillate inventories plunged 9.4% to 7.4 million barrels in the week to Feb. 9, according to Enterprise Singapore data. This week’s stocks were 48.6% lower than a year earlier.
India’s fuel consumption fell in January after scaling a nine-month peak in December, government data showed on Wednesday, as COVID-19 curbs in several states hit mobility and industrial activity.
Consumption of diesel, which accounts for about 40% of India’s refined fuel sales, fell 12.8% month-on-month to 6.37 million tonnes, and was down about 8.4% compared with January 2020.
The February crack for 500 ppm Gasoil is higher at $16.60 /bbl with the 10 ppm crack at $17.60 /bbl. The regrade is at -$2.25 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s cash premiums for 380-cst high-sulphur fuel oil (HSFO) rose on Thursday, lifted by active buying interests in the physical market, while residual fuel inventories in Singapore dropped to a three-week low. The cash differentials for 380-cst HSFO were at a premium of 75 cents per tonne to Singapore quotes, compared with a 46-cent premium a day earlier.
The 380-cst HSFO barge crack for January traded at a discount of $12.86 a barrel to Brent on Thursday, compared with minus $12.75 a barrel on Wednesday.
The front-month VLSFO crack surged to $19.44 per barrel against Dubai crude during Asian trading hours, the highest since February 2020. It was at $18.12 a barrel in the previous session. The cash differential for Asia’s 0.5% VLSFO was at a premium of $13.96 a tonne to Singapore quotes on Thursday, 5 cents higher from Wednesday.
Singapore’s onshore fuel oil stocks dropped 4%, or 929,000 barrels, to 22.2 million barrels, or 3.3 million tonnes, in the week to Feb. 9, according to the Enterprise Singapore data. Onshore fuel oil inventories were 5.5% higher compared with year-ago levels.
The February crack for 180 cst FO is lower at -$8.40 /bbl with the visco spread at $1.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
We will hedge another tranche of March Gasoline Dubai cracks at current levels of $17.75.
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.