Crude Oil
Oil prices dropped sharply as investors bet that the global supply cuts would not be sufficient to offset global demand destruction.
Brent futures fell $ 2.14 to settle at $29.60 a barrel, WTI crude futures fell $ 2.30 to settle at $20.10.
Oman’s Oil and Gas Ministry said Tuesday it will reduce oil production by 23% in May’20 and Jun’20 to comply with the OPEC+ cuts agreed to on Sunday. The drop is equivalent to Oman cutting 201 KB/D for the two months.
India plans to completely fill its SPR by the third week of May’20 by moving about 19 MB into the sites by then, to help the country’s refineries reduce their excess crude as the lockdown has dented transportation and industrial fuel consumption.
api data
Data continues to show massive builds in crude stocks. For the first time though, we are seeing reports of a huge build in distillate stocks.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 126,604 (+6,902 DoD) yesterday, with the total number of confirmed infections at 1,999,811 (+72,887 DoD). (Click here for details).
There is a sharp fall in the number of deaths reported yesterday which, we hope, is a harbinger of things to come.
The US President said on Tuesday he has instructed his administration to halt funding to the WHO over its handling of the coronavirus pandemic while his administration reviews its response to the global crisis.
Naphtha
Asia’s naphtha crack edged down to a discount of $55.38 a tonne to Brent crude versus a discount of $54.40 in the previous session as high supplies weighed. But demand was brisk in the past two days, with buyers from Taiwan, Singapore and South Korea coming forward to snap up cargoes for second-half May delivery.
The May crack has improved to -$5.50 / bbl.
Gasoline
Asia’s gasoline crack hit yet another new low on Tuesday at a discount of $13.15 a barrel to Brent crude as demand for petrol remained dented by restrictions on people movements.
While Spain and Austria have eased movement restrictions, India, a major gasoline exporter, has extended a nationwide lockdown until May 3. Britain and France have also extended their lock downs.
China in the meantime had exported a total of 7.26 million tonnes of refined oil products including gasoline and diesel in March, up from 7.21 million tonnes from the same period last year.
The May crack has improved to -$4.05 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for jet fuel widened to $3.38 per barrel to Singapore quotes on Tuesday, a level not seen since August 2008. They were at a discount of $2.97 per barrel on Monday.
The prompt-month time spread for jet fuel in Singapore remained in steep contango on Tuesday to trade at a discount of $3.50 a barrel.
Cash discounts for 10 ppm gasoil were at $2.69 per barrel to Singapore quotes on Tuesday, a fresh low. They were at a discount of $1.99 a barrel on Monday.
The prompt-month spread for 10 ppm gasoil traded at a discount of $2.32 a barrel on Tuesday, the widest contango since December 2016.
The May crack for 500 ppm Gasoil has is steady $5.55 /bbl with the 10 ppm crack at $ 7.90 / bbl. The regrade is at -$ 5.25 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO fell on Tuesday as suppliers offered steeper discounts for the fuels in the face of limited buying interest and ample supplies.
VLSFO cash discounts fell to minus $9.84 a tonne to Singapore quotes, nearing a record low of minus $10.09 hit on April 3.
Similarly, discounts for 380-cst HSFO fell to their lowest since 2008 at $7.47 a tonne while discounts for 180-cst HSFO fell to a five-month low of minus $9.94 a tonne.
The May crack for 180 cst FO has eased to -$0.60 /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 trade 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.