Crude Oil
Oil prices bounced back on Friday after a slight retracement on Thursday.
Brent officially settled at $62.43 /bbl, up $1.29, or 2.1%. WTI crude settled the session at $59.47 /bbl, up $1.23, or 2.1%.
For the week, Brent gained 5.2% while WTI gained 4.6%.
Markets have been supported largely by the threat of OPEC, and separately Saudi Arabia’s cuts. There is also a feel good factor in the market with the signs of the number active COVID cases easing out. Last, but not least, the easy monetary policy being followed almost globally ensures that there is too much money chasing too few assets.
US energy firms added 7 oil rigs in the week to 12 Feb’21 to total 306 (-372 YoY), this is the 12th week in a row producers have added rigs, the longest streak of additions since Jun’17, according to Baker Hughes.
Money managers raised their net long US crude futures and options positions by 29,566 contracts to total 383,715 in the week to 9 Feb’21, the US CFTC said on Friday.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,410,948 (+6,792 DoD) yesterday. The total number of active cases fell by around 70,000 DoD to 25.35 million. (Click here for details)
Naphtha
Asia’s naphtha crack dropped to $93 per tonne to hit its lowest since Dec. 30, compared to $95.53 per tonne a day earlier.
The February crack is lower at $0.20 /bbl.
The March crack is at $0.05/bbl
Gasoline
Asia’s gasoline crack fell to $2.99 per barrel, its lowest since Dec. 29, from $3.26 per barrel on Wednesday.
The February crack is higher at $4.50 /bbl.
The March crack is at $5.10 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10 ppm sulphur content flipped back to a discount of 4 cents a barrel to Singapore quotes on Thursday, hurt by weaker deal values in the physical trade window. The spot differentials were at a premium of 5 cents per barrel a day earlier.
The Feb/March time spread for 10 ppm gasoil in Singapore remained in backwardation to trade at 20 cents per barrel on Thursday.
Cash discounts for jet fuel remained unchanged at 5 cents per barrel to Singapore quotesWednesday.
The February crack for 500 ppm Gasoil is lower at $6.00 /bbl with the 10 ppm crack at $ 7.10 / bbl. The regrade is at -$ 2.00 /bbl.
The March crack for 500 ppm Gasoil at $6.05 /bbl with the 10 ppm crack at $ 7.25 / bbl. The regrade is at -$ 1.45 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month 0.5% very low-sulphur fuel oil (VLSFO) refining margin inched up on Thursday, holding firm around a one-year high hit earlier in the week.
The front-month VLSFO crack versus Dubai slipped to $14.76 a barrel, up 6 cents from the previous session and near a one-year high of $15 a barrel marked on Tuesday, according to Refinitiv data.
“Tightness in the fuel oil complex will remain a common theme through 2021, especially as the tightness in crude ensures that any uptick in margins will be transferred straight to crude producers if OPEC+ producers can hold their nerve,” said Energy Aspects in a note to clients last week.
The February crack for 180 cst FO is lower at -$3.25 /bbl with the visco spread at $1.10 /bbl.
The March crack for 180 cst FO is at -$2.75 /bbl with the visco spread at $1.30 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action 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.