Crude Oil
Brent crude slid 7% on Thursday after President Donald Trump restricted travel to the United States from Europe as part of measures to try to halt the spread of the Covid 19 virus in the US.
Brent crude futures fell $2.57 to settle at $33.22 a barrel. WTI futures fell $1.48 to settle at $31.50 a barrel.
The six-month Brent contango spread from May to November widened to as much as $7.31 a barrel, a level not seen since January 2015. The cost to transport oil on supertankers soared as major producers scrambled to secure vessels to ship more crude and companies looked for vessels for storage.
As top oil exporter Saudi Arabia moved quickly to boost output, Russia stuck by the decision that led last week to the collapse of its alliance with Riyadh and other producers. Moscow said that there was no point cutting output because it would likely be too little to compensate for the virus’ impact on global demand.
At a global level, the death toll from the COVID-19 in rose to 4,979 (+346 DoD) yesterday, with the total number of confirmed infections at 134,716 126,367 (+8,349 DoD). The growth factor of new cases outside China rose to 1.60 from 1.04 the previous day.(Click here for details).
Russian oil producers did not discuss returning to a deal with OPEC to cut output at a meeting with the energy ministry on Thursday, one of the country’s top oil firms said, adding it was preparing to raise production from Apr’20.
The US Federal Reserve moved to stem a market meltdown on Thursday with offers of $1.5 trillion in short-term loans that some analysts say could point to more aggressive action from the central bank in coming days to stimulate the economy and stabilize the financial system.
Saudi Aramco has rejected at least 3 Asian refiners’ requests for additional bargain-priced crude for Apr’20, however, Saudi Arabia did approve incremental supplies for its top Indian and Chinese customers to fend off market share threats, other sources told Reuters.
Naphtha
Asia’s naphtha crack rose to $58.78 a tonne while the inter-month spread surged 50% to $9 a tonne, making both the values at their highest since March 3 amid brisk demand.
The April crack has dropped to -$1.30 / bbl.
Gasoline
Asia’s gasoline crack fell to $5.37 a barrel, the lowest since March 4, weighed down by high inventories.
Singapore’s onshore light distillates stocks reached an 11-month high of 14.6 million barrels in the week to Wednesday.
The April crack has dropped to $0.90 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s jet fuel crack dropped 30% to a four-session low $7.09 a barrel on Thursday as concerns over a lack of demand deepened.
Singapore’s onshore middle distillates stocks eased 3.6% to reach a two-week low of nearly 11.5 million barrels in the week to Wednesday.
India’s fuel demand grew 4.5% in February from a year earlier, the first increase in two months, indicating some recovery in the country’s industrial activity over the last month. Diesel grew at its fastest in three months, rising 6.3% from a year earlier to 7.16 million tonnes, the data showed.
The April crack for 500 ppm Gasoil has collapsed to $10.50 /bbl with the 10 ppm crack at $ 11.15 / bbl. The regrade is at -$ 2.10 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month time spread for 380-cst HSFO sank to a near 4-1/2 year low on Thursday amid limited demand for the fuel.
The April/May 380-cst HSFO time spread widened its discount to minus $5.50 a tonne, down from minus $4 per tonne on Wednesday and its lowest since October 2015.
Falling crude oil prices, however, helped buoy the front-month 380-cst HSFO barge crack which narrowed its discount to minus $11.64 a barrel against Brent, up from minus $12.48 a barrel in the previous session.
Singapore’s residual fuel oil inventories fell 4% in the week ended March 11, official data showed on Thursday, as a gradual improvement in marine fuel demand at the world’s top bunkering hub and below average net import volumes helped stocks pull away from a nine-month high.
Onshore fuel oil stocks fell by 1.14 million barrels to 24.98 million barrels from the previous week, data from Enterprise Singapore showed.
Residual fuel stocks were 13% higher than the year-ago period. Demand for marine fuels in the Singapore bunkering hub has improved slightly this month after a sharp slowdown in February on seasonal factors and low shipping activity due to the coronavirus outbreak.
The April crack for 180 cst FO has risen to -$3.75 /bbl with the visco spread at $1.20 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
The FO crack is strengthening again in the prompt. We shall add an hedge for 180 cst – Dubai for April at current levels of -$3.75 / bbl.
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.
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.