Crude Oil
Oil prices fell about 1 percent on Friday after disappointing U.S. job growth revived concerns about a slowing global economy and weaker demand for oil. Brent Crude futures fell 56 cents to settle at $ 65.74 /bbl. WTI also gave up 59 cents to settle at $56.07 a barrel.
Prices however took heart from Baker Hughes numbers showing that the number of active rigs fell further by 9 to 834 rigs. This is the lowest level of active rigs in 10 months. Brent had earlier made a low of $ 64.02 / bbl while WTI touched a low of $ 54.52
For the week, Brent gained approximately 1% while WTI gained about 0.5%.
U.S. job growth almost stalled in February, with the economy creating only 20,000 jobs amid a contraction in payrolls in construction and several other sectors. The report dragged down U.S. stock markets, along with oil futures.
Financial markets also took a hit after comments on Thursday from European Central Bank President Mario Draghi that the European economy was in “a period of continued weakness.” The European and U.S. economic weakness comes as growth in Asia is also slowing.
China’s dollar-denominated February exports fell 21 percent from a year earlier, representing the biggest drop in three years, far worse than analysts had expected. Imports dropped 5.2 percent.
So far oil demand has held up, especially in China, where imports of crude remain above 10 million barrels per day (bpd). Yet a slowdown in economic growth could eventually dent fuel consumption and pressure prices.
Hedge funds and other speculators raised their combined futures and options position in New York and London by 21,416 contracts to 155,426 in the week ended March 5, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Naphtha
Asia’s naphtha crack fell to a three-session low of $48.18 a tonne.
The March crack is lower at -$ 6.70 /bbl. The April crack is at -$ 6.80 /bbl
Gasoline
Asia’s gasoline crack eased nearly 4 percent to $4.89 a barrel premium to Brent crude on Friday after hitting near a five-month high in the previous session. The current value was, however, significantly higher versus February’s average of a discount of 13 cents and January’s average of 68 cents.
Although gasoline stocks in ARA had edged up to a two-week high of 1.124 million tonnes in the week to Thursday, the current level was nearly 12.4 percent lower than a year ago.
The March crack is higher at $ 4.35 /bbl. The April crack is at $ 4.00 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s 10ppm gasoil crack hovered around a two-week low of $15.06 a barrel on Friday in thin trade. Only one cash deal was done in the Singapore market.
However, heavy refinery maintenance could temporarily tighten supplies ahead. Taiwan’s Formosa, one of Asia’s key exporters, is in turnaround mode this month. Gasoil inventories held in the Amsterdam-Rotterdam-
ARA gasoil stocks eased by less than 0.2 percent to 2.402 million tonnes, significantly lower than a year ago at 3 million tonnes. Turkey’s Tupras has been buying more diesel than usual because of a 90-day planned maintenance that started in late February at its Izmit refinery.
The March crack is higher at $ 14.00 /bbl with the 10 ppm crack at $14.95 /bbl. The regrade is lower at – $ 0.65 /bbl.
The April crack is at $ 14.20 /bbl with the 10 ppm crack at $15.20 /bbl. The regrade is at – $ 0.30 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The front-month 380-cst fuel oil barge crack’s discount to Brent crude widened on Friday after hitting a more than two-week high earlier in the week despite weaker benchmark crude oil prices.
In the physical markets, 380-cst cash premiums fell to a more than one-week low despite sustained buying interest for cargoes in the Singapore trading window. .
ARA fuel oil inventories fell to a four-week low in the week ending March 6 as weekly net imports of the fuel fell to an eight-month low.
The March 180 cst crack is lower at $ 0.85 / bbl with the visco spread at 80 cents/bbl.
The April 180 cst crack is at $ 0.65 / bbl with the visco spread at 75 cents/bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh hedges 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.
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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.