Crude Oil
Oil prices climbed more than 2% on Friday after the International Energy Agency (IEA) bumped up its 2020 demand forecast.
Brent crude futures settled at $43.24 a barrel, up 89 cents. U.S. West Texas Intermediate settled up 93 cents at $40.55 a barrel.
U.S. crude was little changed on the week while Brent notched a weekly gain of about 1%.
The Paris-based IEA raised its demand forecast to 92.1 million barrels per day (bpd), up 400 kbpd from its outlook last month. A strong stock market also boosted oil prices. A slew of economic data, including a record monthly payrolls addition, pointed to a revival in U.S. business activity in June.
Prices also found support after data showed U.S. energy firms cut the number of oil rigs operating to 181, a record low for a 10th week in a row.
Libya’s NOC resumed force majeure on all oil exports on Sunday. The UAE-backed LNA of Khalifa Haftar, said on Saturday it was reimposing the 6-month blockade after allowing a single tanker to depart loaded with oil from storage.
Money managers cut their net long US crude futures and options positions by 9,804 contracts to total 369,147 in the week to 7 Jul’20, the US CFTC said on Friday.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 571,080 (+3,956 DoD) yesterday, with the total number of confirmed infections at 13,028,182 (+194,677 DoD). (Click here for details).
More than 60,500 new COVID-19 cases were reported in the United States on Thursday, a daily record and the highest daily count for any country since the pathogen emerged in China last year.
Naphtha
Asia’s naphtha crack was at a two-session high of $92.43 a tonne on Thursday, which translates to a premium of more than $3 a barrel over Brent crude, supported by strong demand.
This week saw South Korean and Japanese buyers snapping up August-September cargoes. Strong demand amid tight supplies have kept spot premiums at more than a four-month high.
The August crack has dropped to $ 0.15 /bbl
Gasoline
Asia’s gasoline crack also rose and touched a two-week high of $2.79 a barrel over Brent crude, driven by a vibrant cash market recently.
However, inventory levels reflected a weak market as high supplies persisted. Singapore onshore light distillates inventories for instance rose 9.5% or 1.4 million barrels to reach nearly 16.6 million barrels in the week to July 8, highest since March 20 2019, data from Enterprise Singapore showed.
Cargoes from Europe continued to arrive in Singapore, with the Netherlands having shipped close to 87,000 tonnes while Belgium had moved about 34,000 tonnes to Singapore. Close to 38,000 tonnes had also arrived in the island from the United States, the data showed.
The August crack is lower at $3.35 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10-ppm gasoil were at 58 cents a barrel to Singapore quotes on Thursday, two cents higher than Wednesday.
The prompt-month time spread for 10 ppm gasoil traded at a premium of 41 cents a barrel on Thursday, compared with 67 cents per barrel a week earlier.
Refining margins for gasoil with 10-ppm sulphur content rose by 6 cents to $6.54 a barrel over Dubai crude during Asian trading hours.
India’s oil products demand in June fell 7.8% YoY to 16.29 MMT, or 4.3 MB/D, latest provisional data from the PPAC showed, reflecting weak economic activities during the COVID-19 lockdown period in Asia’s third-largest economy.
The August crack for 500 ppm Gasoil is steady at $5.65 /bbl with the 10 ppm crack at $ 6.45 / bbl. The regrade is at -$ 4.15 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
After sharp gains this week spurred by a sustained buying frenzy for cargoes of 380-cst HSFO, cash differentials of the fuel slipped on Thursday due to slowing trade activity and lower deal values.
Cash premiums for 380-cst HSFO cargoes narrowed to $1.85 per tonne to Singapore quotes, down from a five-month high of $4 per tonne hit in the previous session. The cash differential was at a discount of $2.90 a tonne a week ago.
Singapore’s residual fuel oil inventories jumped 6% in the week to July 8 to a more than three-year high, as limited bunker demand and steady imports pushed supplies higher.
This came as Singapore became for the first time since at least 2015, or as far as available records show, a net importer of fuel oil from China in the latest sign of the rapid increase of Chinese fuel oil production.
Singapore’s onshore fuel oil stocks rose by 1.543 million barrels to 26.666 million barrels in the week ended Wednesday, according to the Enterprise Singapore data.
The August crack for 180 cst FO is lower at – $2.40 /bbl with the visco spread at $1.00 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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.
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.