Crude Oil
Oil prices rose slightly on Tuesday..
Brent crude futures settled at $42.90 a barrel, up 18 cents. U.S. West Texas Intermediate settled up 19 cents at $40.29 a barrel.
Global oil demand will soar by a record 7 MB/D in 2021 as the global economy recovers from the coronavirus crisis but will remain below 2019 levels, OPEC said in its monthly report.
The US President on Tuesday ordered an end to Hong Kong’s special status under US law to punish China for what he called “oppressive actions” against the former British colony.
The US President on Tuesday shut the door on “Phase 2” trade negotiations with China, saying he does not want to talk to Beijing about trade because of the coronavirus pandemic.
api changes
The API reported a much larger than expected draw in crude stocks in its weekly report yesterday. However, crude stocks at Cushing rose by 580 KB.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 580,349 (+5,413 DoD) yesterday, with the total number of confirmed infections at 13,448,500 (+217,917 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack hit a fresh two-week low of $75.73 a tonne on Tuesday on ample supplies.
Naphtha supplies were previously tight due to strong demand and fewer cargoes arriving in Asia.
The August crack has dropped to -$ 1.05 /bbl
Gasoline
Asia’s gasoline crack also hit a two-week low of $1.33 a barrel premium over Brent crude .
The August crack is lower at $2.50 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash discounts for jet fuel narrowed on Tuesday as the contango structure for the prompt month spread tightened.
Cash discounts for jet fuel were at 29 cents a barrel to Singapore quotes on Tuesday, compared with 34 cents per barrel a day earlier. The July/August time spread for jet fuel in Singapore traded at a discount of 50 cents a barrel on Tuesday, as against Monday’s 60 cents, Refinitiv Eikon data showed.
The jet market found some support after as flights on some domestic routes were restarted, but traders said many long-haul international flights remain grounded due to a renewed wave in COVID-19 infections which is dampening recovery hopes..
The August crack for 500 ppm Gasoil is lower at $5.25 /bbl with the 10 ppm crack at $ 6.10 / bbl. The regrade is at -$ 4.20 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s spot viscosity spread fell to about 11 cents a tonne on Tuesday, its lowest in months as cash differentials of both fuel oil grades moved in the opposite directions. Cash discounts for 180-cst HSFO cargoes deepened on Tuesday amid weaker deal values in the Singapore window while 380-cst HSFO cash premiums widened, lifted higher by renewed buying interest.
In the paper market, the front-month viscosity spread fell to $5 per tonne, its lowest in more than two-months. As many U.S. refineries historically process heavy crudes, the United States has increased purchases of fuel oil, including from Russia. Supplies by Moscow doubled to 11 million tonnes last year from 2018. In the first six months of this year, shipments of fuel oil from Russia stood at 5.3 million tonnes, on track to match record-high volumes of 2019.
The August crack for 180 cst FO is lower at – $3.05 /bbl with the visco spread at $0.80 /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.