Oil prices continued their March upwards with Brent reaching its highest levels for 2019 during the session. Brent crude gained 96 cents to settle at $64.57 a barrel. WTI crude rose 51 cents to settle at $54.41 a barrel.
The trading session saw Brent crude futures make a new high for 2019 at $ 64.81 as markets continued to play the stock decline story along with prospects of a US China pact. Oil prices also drew support from a surprise increase in China’s exports in January and a sharp rise in imports of crude oil before the Lunar New Year holidays in February.
China’s January dollar-denominated exports rose 9.1 percent from a year earlier, while imports dropped 1.5 percent, both beating analysts’ expectations.
U.S. President Donald Trump was considering a 60-day extension of the Mar. 1 deadline for higher tariffs on Chinese imports, Bloomberg said on Thursday, citing unnamed sources.
However, some dark spots have appeared on the horizon as well with U.S. retail spending being reported at their lowest level since 2009. The U.S. economy’s outlook was further dimmed by other data showing an unexpected increase in the number of Americans filing claims for unemployment benefits last week. Ironically, the economic numbers weakened the US dollar which would have spurred additional purchase of crude futures.
Germany’s economy stalled in the final quarter of last year, just skirting recession as fallout from global trade disputes and Brexit put the brakes on a decade of expansion amid signs that exports will stay subdued for the time being.
Singapore’s economy grew at its slowest pace in more than two years in the fourth quarter, data showed on Friday, as the trade ministry warned manufacturing is likely to see a “significant moderation” this year.
U.S. President Donald Trump vowed on Thursday to declare a national emergency in an attempt to fund his U.S.-Mexico border wall without congressional approval, a step likely to plunge him into a court battle with Congress over constitutional powers.
Asia’s naphtha crack was at a four-session low of $36.58 a tonne on Thursday, battered by weak gasoline fundamentals and rising oil prices.
Having said that, demand for the fuel from the petrochemical sector was firm, with several buyers spanning from those in Singapore to Malaysia and South Korea seeking cargoes for second-half March delivery. Trading sources said South Korea’s KPIC could have paid a premium of slightly more than $7 a tonne to Japan quotes on a cost-and-freight (C&F) basis for naphtha scheduled for second-half March arrival at Onsan but this could not be directly confirmed.
KPIC had on Jan. 28 bought the fuel for first-half March delivery at a premium of $2.50 to $3.50. Its purchase this week came a day after Hanwha Total had paid similar price levels for naphtha scheduled for the same delivery period of second-half March but to Daesan. Singapore’s PCS had also bought naphtha for second-half March delivery but details were not immediately clear. Malaysia’s Titan and Taiwan’s Formosa were also looking to replenish March stocks.
The March crack is lower at -$ 7.60 /bbl
Asia’s gasoline crack discount widened for the third straight session to reach 79 cents a barrel versus 63 cents in the previous session as the supply glut persisted.
Singapore’s onshore light distillates inventories hit a new high of about 16.5 million barrels in the week to Wednesday, official data showed.
The data also showed that a medium-range vessel size gasoline cargo had arrived in Singapore from the United States. This is a rare occurrence as freight economics do not normally favor such movement. Japan’s gasoline stocks rose also rose by 240 KB to 10.73 million barrels in the week to Feb. 9 according to official data.
The March crack has flipped into positive territory at $ 0.10 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash differentials for gasoil with 10ppm sulphur content were at a discount of 39 cents a barrel to Singapore quotes, compared with Wednesday’s discount of 43 cents per barrel.
Stocks of middle distillates in Singapore fell by 161,000 barrels in the week to Feb. 13 in a fourth straight week of draw downs, data from Enterprise Singapore showed on Thursday.
Cash discounts for jet fuel were at 30 cents a barrel to Singapore quotes on Thursday, compared with a discount of 34 cents a barrel on Wednesday.
The March crack has improved to $ 14.20 /bbl with the 10 ppm crack at $15.20 /bbl. The regrade is at – $ 0.10 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s cash premiums for mainstay 380-cst high-sulphur fuel oil slipped on Thursday after onshore inventories in Singapore soared to their highest levels in more than 10 months.
Cash premiums for 380-cst high-sulphur fuel oil (HSFO) were at $2.61 a barrel to Singapore quotes, a fresh low since June last year. They were at a premium of $2.64 a barrel on Wednesday.
Fuel oil stocks in Singapore rose by 3.8 million barrels in the week to Feb. 13 to 23.15 million barrels, Enterprise Singapore data showed on Thursday. These levels of inventory have not been seen since March last year.
The region’s 180-cst fuel oil crack to Dubai crude slipped by a cent to $1.44 a barrel on Thursday amid firmer crude oil prices. The more actively-traded 380-cst barge crack to Brent crude for February fell to minus $2.22 a barrel during Asian trading hours on Thursday, compared with minus $2.10 a barrel on Wednesday, according to Refinitiv Eikon data.
The March180 cst crack has dropped to $ 1.10 / bbl with the visco spread at $ 0.60 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh hedges for today.
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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.