Crude Oil
Oil prices fell on Thursday as OPEC forecast slower demand for its crude next year. Brent crude futures settled 49 cents lower at $66.52 a barrel. WTI crude futures fell 23 cents to settle at $60.20 a barrel, climbing $2.60.
Oil firms shut more than 1 million barrels per day of oil production, 53% of Gulf of Mexico’s output, as Tropical Storm Barry intensified on Thursday. The storm, which could become a hurricane this week, was on a path through the north central Gulf of Mexico.
OPEC gave its first 2020 forecasts in a monthly report, saying the world would need 29.27 million bpd of crude from its 14 members next year, down 1.34 million bpd from this year. The forecast points to the return of a surplus despite an OPEC-led pact to restrain supplies, and was seen as a drag on prices.
The US has decided not to impose sanctions on Iranian Foreign Minister Mohammad Javad Zarif for now, two sources familiar with the matter said on Thursday, in a sign Washington may be holding a door open for diplomacy.
The US will sanction China if it continues to import Iranian crude in violation of American sanctions, a US Department of State spokeswoman warned Thursday. China continues to import about 150 KB/D to 220 KB/D of Iranian crude, much of it in the form of debt repayment.
Trump said on Thursday that China was not living up to promises it made on buying agricultural products from American farmers as the world’s two largest economies work to resolve a trade dispute.
Singapore’s economy performed badly in Q2, badly missing forecasts, with the slowest annual growth since the global financial crisis, and the largest q/q contraction in 7 years as the manufacturing sector continued to decline, preliminary data showed on Friday.
Indian and U.S. trade negotiators will meet on Friday, with little sign of a compromise on a series of protectionist measures taken by the two governments in recent months that have strained ties between the strategic partners.
Naphtha
Asia’s naphtha crack rose for a second day to reach a 9-week high of $40.43 a tonne on Thursday.
The July crack is lower at -$ 5.75 /bbl
Gasoline
Asia’s gasoline margin was near a three-month high of $8.09 a barrel as supplies tightened on production cuts and refinery maintenance/outages.
Singapore’s onshore light distillate stocks fell for the third straight week, this time by 1.04% or 119,000 barrels to a six-week low of 11.309 million barrels in the week to Thursday, data from Enterprise Singapore showed.
The July crack is lower at $ 8.45 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for gasoil with 10ppm sulphur content were at 18 cents a barrel to Singapore quotes on Thursday, compared with a discount of 17 cents per barrel a day earlier.
The Asian gasoil market got a breather after China exported fewer barrels in May, less than half the volume in the preceding month, which helped to stem the recent tide of oversupply in the region.
Cash premiums for jet fuel rose to 27 cents a barrel to Singapore quotes on Thursday, compared with a premium of 23 cents a barrel on Wednesday.
Singapore’s onshore inventories for middle distillates rose to a two-week high of 11.06 million barrels in the week to July 10, data from Enterprise Singapore showed on Thursday.
The July crack for 500 ppm Gasoil has dropped to $ 14.70 /bbl with the 10 ppm crack at $ 15.40 / bbl. The regrade is at +$ 0.45 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asian cash premiums for cargoes of high-sulphur fuel oil surged to record highs on Thursday, boosted by intense buying interest amid shrinking supplies.
This came as Singapore fuel oil inventories fell for a fourth straight week to a five-month low amid stubbornly low arbitrage inflows into the storage and trading hub in the week ended July 10.
Cash premiums for 380-cst HSFO jumped to $24.31 per tonne to Singapore quotes, up from $16.80 a tonne in the previous session.
Bullish market fundamentals also lifted cash premiums of lower viscosity 180-cst HSFO to a record $22.22 per tonne above Singapore quotes, up from $12.88 per tonne on Wednesday.
Similarly, the front-month 380-cst HSFO time-spread rose to a record $35.75 per tonne premium, up from $28 per tonne on Wednesday.
The July180 cst crack is at an marginally lower at $ 7.70 / bbl with the visco spread at $ 0.65 /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.