Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

The Oil Price Digest could not be published for most of last week due to unavoidable circumstances

Markets reacted to poor economic data out of the US as crude prices once again fell to settle almost unchanged for the week.

Brent Crude futures settled down 72 cents, or 1%, at $70.59 per barrel. For the week, Brent fell 0.2%, after last week’s 7.4% drop. 

WTI settled down 65 cents, or 0.9%, at $68.44 per barrel. For the week, it rose 0.2% – barely a makeup for last week’s 7.7% plunge, which was its sharpest since October 2020.

In its latest monthly oil market report, the cartel said expectations for global crude demand growth remained at 6m bbl/day to average 96.6m bbl/day. It said weaker than expected Q1 growth in OECD countries was offset by above-forecast consumption growth in non-OECD countries in Q2. Little change is expected to global crude demand in the second half of 2021 despite stronger GDP expectations, with any rally largely expected to benefit the non-oil intensive sectors, OPEC said on Thursday.

The International Energy Agency on Thursday said rising demand for crude oil reversed course in July and was expected to increase at a slower rate over the rest of 2021 because of surging COVID-19 infections from the Delta strain.

China’s refinery throughput fell 0.9% in July compared with the same period a year earlier, marking the lowest level on a daily basis since May 2020, showed data from the National Bureau of Statistics on Monday. Volume was at 59.06 million tonnes last month, or about 13.9 million barrels per day.

Official data from China on retail sales, industrial production and urban investment is expected to show that a recent tightening of coronavirus restrictions prompted declines in activity in the world’s second-biggest economy in July.

U.S. energy firms added the most oil rigs in a week since April as the total rig count more than doubled from a record low a year ago amid a recovery in crude prices. U.S. oil rigs rose 10 to 397 this week, also their highest since April 2020, and up from 172 a year ago, which was their lowest since 2005 before the shale boom boosted activity.

Money managers reduced their net long U.S. crude futures and options holdings in the week to Aug. 10, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday. Speculators also cut their futures and options positions in New York and London by 21,777 contracts to 283,601 over the period, the CFTC said.

At a global level, the death toll from the COVID-19 virus rose to 4.37 Million (+8,095 DoD) yesterday. The total number of active cases rose by 40,000 DoD to 17.17 million. (Click here for details).

The Philippines extended a ban on travellers from 10 countries including India, which reported 40,120 new coronavirus cases in the last 24 hours, while South Korea’s Prime Minister urged citizens to minimise holiday travel amid a worsening fourth wave of infections.

Asia’s naphtha crack eased on Friday, while the inter-month spread between second-half September and October narrowed further in backwardation to $4.50 a tonne, the lowest since February.

The crack fell to $134.40 a tonne from $140 in the last session.

The September crack is lower at $4.15 / bbl.

Asia’s gasoline crack also inched lower on Friday. However, margins held above $9 a barrel for a seventh consecutive session on strong demand. The crack settled 19 cents at $9.27 /bbl on Friday

Gasoline and naphtha stocks held in ARA remained flat in the week to Thursday, data from Dutch consultancy Insights Global showed.

The September crack is lower at $10.10 / bbl.


Click Here for a graphical depiction of Global Gasoline stocks by region.

Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped 1.2% to 2.1 million tonnes in the week ended Aug. 12, data from Dutch consultancy Insights Global showed.

Cash differentials for jet fuel were at a discount of 5 cents per barrel to Singapore quotes, while the Aug/Sept. time-spread for the aviation fuel in Singapore traded at minus 4 cents per barrel on Friday.

Asian refining margins for jet fuel slipped on Friday, posting their biggest weekly decline in more than two months, weighed down by persistent weakness in aviation demand as several countries continue to battle fresh waves of COVID-19 infections.

Asian jet fuel refining margins for jet fuel were at $5.48 per barrel over Dubai crude during Asian trading hours on Friday, down 5 cents from a day earlier.

Although wider vaccinations have bolstered some hopes for travel demand in coming months, traders said the lingering worries over the infectious Delta variant would delay any substantial recovery well into the next year.

The September crack for 500 ppm Gasoil is lower at $5.05 /bbl with the 10 ppm crack at $ 6.55 /bbl. The regrade is at -$ 1.10 /bbl. 

Click Here for a graphical depiction of Global Distillate stocks by region.

Asia’s cash premium for 380-cst high-sulphur fuel oil (HSFO) inched lower on Friday, while the front-month barge crack for the residual fuel grade posted a second straight weekly drop.

The cash premium for 380-cst HSFO was at $3.05 per tonne to Singapore quotes, compared with $3.10 per tonne a day earlier.

The 380-cst HSFO barge crack for September traded at a discount of $11.18 a barrel to Brent on Friday, compared with minus $11.20 a barrel on Thursday. The crack has shed about 0.5% this week, Refinitiv data showed.

Meanwhile, the front-month VLSFO crack slipped 30 cents to $11.30 per barrel against Dubai crude during Asian trading hours.

Cash differential for Asia’s 0.5% VLSFO was at a premium of $1.04 a tonne to Singapore quotes on Friday, against $1.20 per tonne in the previous session.

Fuel oil stocks held independently in ARA fell 0.6% to 1.2 million tonnes in the week to Aug. 12, data from Dutch consultancy Insights Global showed.

The September crack for 180 cst FO is higher at  -$5.25 /bbl with the visco spread at $1.30 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

The Naphtha Dubai crack we hedged last week for September at levels of $5.35 /bbl was a really good hedge. It underlines the requirement to execute a hedging program in a disciplined manner. No fresh activity 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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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