Crude Oil
Oil prices slid nearly 2% on Thursday after U.S. data showed a surprise build in crude stockpiles last week.
Brent crude fell 73 to settle at $40.06 a barrel, while WTI crude 75 to settle $37.30 per barrel.
Iraq lowered its crude oil output in Aug’20 to 3.578 MB/D, but remained above its 3.404 MB/D quota. This includes 3.122 MB/D of federally controlled output and 456 KB/D from the KRG, which is unwilling to bring its production down in line with the deal.
The Sri Lankan navy has towed a fire-stricken supertanker , which is loaded with 2 MB of oil, further out to sea to keep it off the coast of the Indian Ocean island after the wind picked up strength and changed direction, a spokesman said on Thursday.
DOE data
The build in crude stocks appears to have been caused mainly by a drop in refinery run rates while both production and imports increased. The drop in run rates also seems to be the chief cause of the draw in products as demand for both gasoline and distillates has dropped.
The crude build appears to be under-reported. The distillate draw too seems overstated.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 913,292 (+5,922 DoD) yesterday. The total number of active cases has surged by around 56,000 to 7,071,740. (Click here for details).
Naphtha
Asia’s naphtha crack eased to reach a two-session low of $85.20 a tonne.
The October crack is lower at $ 2.00 / bbl.
Gasoline
Asia’s gasoline crack was at a two-session high of $2.71 a barrel on Thursday.
However, overall demand has been choppy and supplies have stayed high. The current stock levels are 32% higher versus a year ago when inventories were at close to 11.2 million barrels.
The October crack is lower at $ 3.30 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash discounts for 10 ppm gasoil narrowed marginally on Thursday, after weekly middle distillate inventories in Singapore dropped from a multi-year high hit last week.
Cash discounts for 10 ppm gasoil were at 67 cents a barrel to Singapore quotes on Thursday, compared with a discount of 70 cents a day earlier.
The September/October time-spread for the benchmark gasoil grade in Singapore remained in a contango structure to trade at a discount of 63 cents a barrel.
The October crack for 500 ppm Gasoil is lower at $3.00 /bbl with the 10 ppm crack at $ 3.50 / bbl. The regrade is at -$ 4.35 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month 0.5% VLSFO time spread firmed on Thursday, narrowing its contango to a near one-month high after Singapore fuel oil inventories posted a third straight week of decline.
The Oct/Nov VLSFO time spread rose to a discount of $1.75 a tonne, up from minus $2.75 a tonne in the previous session and its narrowest discount since Aug. 17.
In the physical market, however, an absence of demand for VLSFO cargoes kept cash differentials depressed at a one-week low of minus $2.95 a tonne to Singapore quotes.
The October crack for 180 cst FO is higher at – $2.45 /bbl with the visco spread at $0.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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.