Crude Oil
Oil prices edged higher on Wednesday.
Brent crude futures for February settled 32 cents higher at $51.08 a barrel, while WTI futures settled up 20 cents at $47.82 a barrel.
Libya’s es-Sider and Zueitina oil terminals were closed on Wednesday due to bad weather, the NOC said. Terminals in Ras Lanuf and Brega could also be affected should the situation persist for another 72 hours, risking production levels because of limited storage capacity
The International Energy Agency (IEA) warned on Tuesday that it will take some time to reverse the collapse in global oil demand during the pandemic. The IEA revised down its estimates for oil demand this year by 50 kbpd and for next year by 170 kbpd, citing reduced jet fuel use as fewer people travel by air.
doe data
Contrary to the API Data, the DOE reported a draw in crude stocks. This was not unexpected as, even now, stocks reported by DOE are roughly 5 million barrels than those reported by the API.
Both gasoline and distillate stocks were reported to have built marginally. This is in contrast to our material balance report which suggests draws across the board.
A drop in net imports of close to 2 mbpd suggest a draw of 13 million barrels as against the 3 million reported. Similarly, healthy increases in Gasoline and distillate demand suggest significant draws instead of the builds reported.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,654,349 (+13,446 DoD) yesterday. The total number of active cases rose by around 160,000 DoD to 20.51 million. (Click here for details).
Naphtha
Asia’s naphtha intermonth spread flipped into the positive zone for the first time in two months. The intermonth spread was at a premium of $1.50 a tonne.
The January crack is higher at $0.50 /bbl.
Gasoline
No fresh news on the gasoline markets.
The January crack is higher at $3.30 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10 ppm sulphur content were at a discount of 5 cents a barrel over Singapore quotes, compared with a 6-cent discount on Tuesday.
Refining margins for 10 ppm gasoil slipped to $6.18 a barrel over Dubai crude during Asian trading hours, down from Tuesday’s $6.44 per barrel that was the strongest level since July 30.
Asian refining profits for gasoil have hit 4-1/2-month highs on recovering transportation and industrial activity led by China and India, though analysts warn that rising shipments from those and other exporters may curb further gains.
India’s diesel sales fell 5.2% YoY while its gasoline sales rose by 9.5% YoY in the first half of Dec’20, preliminary data from state-run fuel retailers showed on Wednesday, signalling that industrial growth has not yet reached pre-COVID-19 levels.
Middle-distillate inventories in Fujairah dipped marginally by 9,000 barrels to 6.05 million barrels in the week ended Dec. 14, data via S&P Global Platts showed. The weekly stocks in Fujairah have averaged 4.2 million barrels so far in 2020, compared with the weekly average of 2.4 million barrels in 2019.
The January crack for 500 ppm Gasoil is unchanged at $5.50 /bbl with the 10 ppm crack at $ 6.30 / bbl. The regrade is at -$ 0.45 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month VLSFO crack was at $10.12 per barrel against Dubai crude during Asian trade on Wednesday, down 2 cents from a day earlier.
Cash differentials for Asia’s 0.5% VLSFO were at a discount of $1.30 a tonne to Singapore quotes, compared with a discount of $1.05 per tonne a day earlier.
Asia’s cash premium for 380-cst HSFO rose 27 cents to $1.79 per tonne to Singapore quotes on Wednesday, backed by a firmer deal in the physical trading window.
Fujairah inventories for heavy distillates and residues rose 11%, or 1.1 million barrels from the previous week to 11.3 million barrels, data via S&P Global Platts showed. Compared with year-ago levels, the weekly fuel oil inventories at FOIZ were about 1% higher. Fuel oil stocks at FOIZ have averaged 12.9 million barrels so far in 2020, compared with a weekly average of 10.8 million barrels in 2019.
The January crack for 180 cst FO is higher at -$1.70 /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.