Crude Oil
Oil prices ended up mixed on Friday as Brent settled below $ 40 for the second time in the week.
Brent crude fell 23 cents to settle at $39.83 a barrel, while WTI crude rose 3 cents to settle at $37.33 per barrel.
Both Brent and WTI lost about 6% this week as market hopes for a quick recovery started diminishing.
Energy producers and communities along the US Gulf Coast organized evacuations of residents and offshore workers as Tropical Storm Sally strengthened as it crept up the warm waters of the US Gulf of Mexico on Sunday.
US energy firms cut 1 oil rig in the week to 11 Sep’20 to total 180 (-553 YoY), even as a rebound in crude prices from coronavirus lows over the past few months prompted some producers to return to the wellpad, according to Baker Hughes.
Money managers cut their net long US crude futures and options positions by 57,430 contracts to total 277,553 in the week to 8 Sep’20, the US CFTC said on Friday.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 927,986 (+3,905 DoD) yesterday. The total number of active cases rose by around 25,000 to 7,226,548. (Click here for details).
The WHO reported a record one-day increase in global coronavirus cases on Sunday, with the total rising by 307,930 in 24 hours. The biggest increases were from India, the US and Brazil.
Naphtha
Asia’s naphtha inter-month spread hit a six-week high on Friday, supported by strong demand and tighter supplies due to lower incoming October East-bound cargoes, which could fall to a six-month low of 1.4 million tonnes.
The current front-month time spread is $5.50 a tonne.
The October crack is higher at $ 2.20 / bbl.
Gasoline
Asia’s gasoline crack rose to a three-week high of $3.12 a barrel on Friday supported by expectations of low refinery runs.
Gasoline inventories held at ARA refining and storage hub eased to a two-week low of 1.375 million tonnes..
The October crack is higher at $ 4.00 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash discounts for 10 ppm gasoil posted their eighth consecutive weekly decline on Friday.
Cash discounts for 10 ppm gasoil were at 70 cents a barrel to Singapore quotes, compared with a discount of 67 cents per barrel on Thursday. The differentials have dipped 6.1% this week.
India’s diesel consumption dropped by about 12% to 4.85 million tonnes in August as a surge in coronavirus infections continued to rattle economic activity.
Market watchers believe the country would ramp up its export volumes due to weaker domestic demand. India’s gasoil exports this month are expected to close around the revised August assessment of 2.44 million tonnes.
Jet fuel stocks held in ARA rose 3.5% to 996 KT in the week ended Sept. 10. Compared with a year earlier, ARA gasoil inventories were up 2.3%, while jet fuel stocks were 45% higher.
The October crack for 500 ppm Gasoil is higher at $3.60 /bbl with the 10 ppm crack at $ 4.10 / bbl. The regrade is at -$ 3.95 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s cash discount for 0.5% VLSFO narrowed on Friday, while cracks for the marine fuel edged higher to their strongest in more than a week.
Cash discount for Asia’s 0.5% VLSFO was at $2.43 a tonne to Singapore quotes on Friday, compared with a discount of $2.95 per tonne a day earlier.
The September/October time spread narrowed its contango structure to trade at a discount of $1.75 per tonne on Friday, compared with minus $3 per tonne in the previous session.
Fuel oil stocks in ARA refining and storage jumped 17% from the previous week to a three-week high of 1.233 million tonnes in the week ended Sept. 10. Compared with last year, however, the inventories at the ARA hub were 2% lower but were slightly above the five-year seasonal average of 1.153 million tonnes.
The October crack for 180 cst FO is higher at – $2.40 /bbl with the visco spread at $0.70 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh transactions 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.