Oil prices fell more than 2 percent on Thursday, with Brent slipping back from four-month highs as investors focused on the risk that emerging market crises and trade disputes could dent demand even as supply tightens. Brent crude fell $ 1.56 cents to settle at $78.18 a barrel. WTI crude futures settled $1.78 lower at $68.59 a barrel.
The market tumbled early in the session as investors focused on the bearish elements of the IEA report. The International Energy Agency warned that although the oil market was tightening at the moment and world oil demand would reach 100 million barrels per day (bpd) in the next three months, global economic risks were mounting.
Prices slipped again after U.S. President Donald Trump said in a tweet that the United States was under no pressure to make a trade deal with China. U.S. companies in China are being hurt by mounting trade tensions between Washington and Beijing, according to a survey, prompting U.S. business lobbies to urge the Trump administration to reconsider its approach.
The category 4 Hurricane Florence weakened to category 2 status as it began hitting the shores of North Carolina.
Asia’s naphtha intermonth contango deepened to $3.50 a tonne on Thursday from $2.25 from the previous session, making this the steepest contango since Oct. 13 2016 as high supplies swept across the region.
The bearishness could last at least another month as there are no signs the abundant supplies will ease, especially with reduced demand from petrochemical units that have shut for planned maintenance. Spot prices were crushed as a result, with Formosa paying its first discount since February this week.
The balance September crack is lower at -$ 1.05 /bbl. The October crack is at -$ 0.25 /bbl
Asia’s gasoline crack eased 3 cents to $8.51 a barrel but this was sharply higher versus the summer driving season in June this year when the monthly average was around $5.60.
Singapore’s onshore light distillates stocks plunged by 12.6 percent or 1.6 million barrels to a reach a 9-1/2 month low of 11.36 million barrels in the week to Sept. 12.
The balance September crack has fallen to $ 10.00 /bbl. The October crack is at $ 9.30 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash premiums for gasoil with 10ppm sulphur content were at 51 cents a barrel to Singapore quotes on Thursday, compared with 44 cents a barrel on Wednesday.
Meanwhile, cash discounts for jet fuel narrowed to 40 cents a barrel to Singapore quotes on Thursday, compared with a discount of 42 cents on Wednesday.
China is drawing up a plan to replace a million heavy duty diesel trucks, almost 20 percent of the national fleet, with ones that burn cleaner fuel, as Beijing ramps up its war on pollution, potentially dealing a heavy blow to oil refiners. The transport and environment ministries are considering proposals that include replacing vehicles with more modern trucks using a higher grade of diesel called National Five, and using electric trucks or ones that run on liquefied natural gas (LNG).
Singapore onshore middle distillate stocks fell 18 percent in the week to Sept. 12 to 9.3 million barrels. Overall, onshore middle distillate inventories were about 27 percent lower than a year ago.
The balance September crack has dropped to $ 14.90 / bbl with the 10 ppm crack at $ 15.70 /bbl. The regrade is lower at – $ 0.80 /bbl.
The October crack is at $ 15.00 / bbl with the 10 ppm crack at $ 15.80 /bbl. The regrade is at $ 0.15 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Sentiment was steady in Asia’s fuel oil market on Thursday as industry participants kept a close watch on arbitrage supplies into Singapore for October.
While higher fuel oil arbitrage flows into Singapore in September provided some relief after months of supply shortages, a narrow arbitrage window amid a backwardated market structure is expected to limit fuel oil inflows in October.
Meanwhile, onshore Singapore inventories of fuel oil dipped to a three-week low of 15.943 million barrels, or about 2.38 million tonnes, in the week ended Sept. 12.
The balance September180 cst crack is lower at -$ 5.55 / bbl with the visco spread at $ 0.65 /bbl.
The October 180 cst crack is at -$ 5.10 / bbl with the visco spread at $ 1.10 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
Nothing fresh to report today.
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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.