Crude Oil
Oil prices eased on Thursday after the IEA lowered its 2020 oil demand forecast.
Brent crude fell 47 cents to settle at $44.96 a barrel, while WTI fell 43 cents to $42.24 per barrel.
Resilience in equities markets and a weak dollar, however, limited losses.
The IEA cut its 2020 oil demand forecast on Thursday by 140 KB/D to 91.9 MB/D, warning that reduced air travel due to the coronavirus pandemic would lower global oil demand this year by 8.1 MB/D.
Wall Street has recovered most of the trillions in market capitalization lost early in the pandemic, and the S&P 500 index briefly traded on Thursday above its record closing high.
The dollar fell to its lowest in a week against a basket of currencies. A weaker dollar makes oil cheaper for holders of foreign currencies.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 756,717 (+6,653 DoD) yesterday, with the total number of confirmed infections at 21,057,612 (+284,019 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack recovered 5.4% to reach a two-session high of $56.48 a tonne on Thursday.
However, spot prices remained under pressure after levels turned negative for the first time this week in three months in South Korea due to ample supplies.
About 1.4 million tonnes of naphtha has been provisionally booked for arrival in Asia next month from the West, down 22% from August’ s arrivals.
The September crack has improved to $0.50 /bbl.
Gasoline
Asia’s gasoline crack was at a four-session low of $1.58 a barrel as demand recovery was not consistent across regions.
Singapore’s light distillates stocks were at a two-week high of 15.8 million barrels in the week to Aug. 12.
The September crack is lower at $3.40 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10 ppm gasoil were at a discount of 24 cents a barrel to Singapore quotes on Thursday, compared with a 21-cent discount a day earlier.
Jet fuel demand will plunge by 39% or 3.1 MB/D this year as the recovery has been “weaker than anticipated with flight schedules still well below normal levels,” the IEA said yesterday.
The September crack for 500 ppm Gasoil is steady at $5.50 /bbl with the 10 ppm crack at $ 6.30 / bbl. The regrade is at -$ 4.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month 0.5% VLSFO crack against Dubai crude extended gains on Thursday, climbing to a two-week high as crude oil prices slipped.
The September crack for 180 cst FO is higher at – $2.35 /bbl with the visco spread at $0.90 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh activity for 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.