Oil prices rose on Tuesday as investors focused on the rollout of COVID-19 vaccines, looking past tightening lockdowns in Europe and forecasts for a slower-than-expected recovery in fuel demand.
Brent crude futures for February setter 47 cents higher at $50.76 a barrel, while WTI futures for January settled up 63 cents at $47.62 a barrel.
Exports of Russian Urals oil via the 1 MB/D Druzhba pipeline are likely to fall in Q1’21 as sellers have been pressing for higher crude prices that margin-strapped refiners cannot afford, five trade sources told Reuters on Tuesday.
The latest snapshot of U.S. oil supplies showed crude oil stocks unexpectedly rose last week, according to the API. Crude inventories swelled by 2 million barrels in the week to Dec. 11 to about 495 million barrels. The build in Distillate stocks is particularly high.
Official DOE data comes today.
At a global level, the death toll from the COVID-19 virus rose to 1,640,625 (+12,058 DoD) yesterday. The total number of active cases rose by around 110,000 DoD to 20.35 million. (Click here for details).
Moderna Inc’s COVID-19 vaccine appeared set for regulatory authorization this week after US Food and Drug Administration staff endorsed it as safe and effective in documents released Tuesday.
Asia’s naphtha crack hit a 1-1/2-month high of $70.63 a tonne on Tuesday.
A Japanese petrochemical company came forward to buy another naphtha cargo with 80% paraffin content for first-half February delivery. They had on Dec. 11 bought a cargo of similar grade at a premium of about $13 a tonne, also tied to second-half December delivery pricing formula.
The January crack is higher at $0.15 /bbl.
No fresh news on the gasoline markets.
The January crack is lower at $2.95 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash discounts for jet fuel narrowed to 13 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 27 cents per barrel on Monday.
Asian refining margins for jet fuel climbed for a third consecutive session on Tuesday, hitting a more than nine-month high, as aviation demand begins to find some support from increasing number of scheduled operating flights. Refining margins for jet fuel gained 26 cents to $5.09 per barrel over Dubai crude during Asian trade on Tuesday, a level not seen since March 13.
The January crack for 500 ppm Gasoil is lower at $5.50 /bbl with the 10 ppm crack at $ 6.30 / bbl. The regrade is at -$ 0.50 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s cash premiums for 380-cst HSFO rose to $1.52 per tonne to Singapore quotes on Tuesday, the highest since Dec. 3. It was at a premium of 92 cents per tonne a day earlier.
The 380-cst HSFO barge crack for January gained 30 cents to trade at a discount of $6.21 a barrel to Brent. The crack, however, has shed 35.3% in the last month, which has partly prompted refiners to maintain limited supplies of the residual fuel.
Cash differentials for Asia’s 0.5% VLSFO were at a discount of $1.05 a tonne to Singapore quotes on Tuesday, weighed down by muted demand for physical cargoes. They were at a premium of 9 cents per tonne on Monday.
The front-month VLSFO crack inched up one cent to $10.14 per barrel against Dubai crude during Asian trading hours.
The Dec/Jan time spread for the marine fuel grade flipped into a contango on Tuesday to trade at a discount of 50 cents per tonne.
The January crack for 180 cst FO is higher at -$1.95 /bbl with the visco spread at $0.80 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
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.
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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.