Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose around 2% on Thursday, as record U.S. implied demand, falling crude stockpiles and an upbeat economic outlook from the Federal Reserve trumped fears of the Omicron coronavirus variant hurting global consumption.

Brent crude futures  $1.14, or 1.5%, to settle at $75.02 per barrel after a high of $75.58 and bottom of $74.  WTI crude futures rose $1.51, or 2.1%, to settle at $72.38 a barrel after moving between a session peak of $72.98 and low of $71.05.

In Saudi Arabia, crude oil exports in October rose for a sixth straight month to their highest since April 2020, the Joint Organisation Data Initiative (JODI) said on Thursday.

At a global level, the death toll from the COVID-19 virus rose to 5.35 Million (+7,027 DoD) yesterday. The total number of active cases rose by 250,000 DoD to 22.57 million. (Click here for details).

Britain, South Korea and South Africa reported record daily Covid-19 cases on Wednesday.

Asia’s naphtha crack dipped to $158.73 per tonne on Thursday, compared with $163.40 a tonne on Wednesday.

The January crack is unchanged at $ 5.10 /bbl.

Asian refining margins for gasoline fell on Thursday as raw material crude prices firmed, while some traders were concerned the market would remain under pressure in the near term as the Omicron coronavirus variant threatens demand across regions.

The refining profit margins slipped to $10.18 per barrel on Thursday, down from $12.64 per barrel touched in the previous session.

Gasoline sales in India during the first half of December continued to stay above pre-COVID-19 levels as people continued to prefer using personal vehicles over public transport for safety reasons. Sales were at 1.12 million tonnes, up 16.2% from the same period in 2019, 6.9% higher than in November and up 5.9% from a year ago, the data showed.

Singapore’s light distillate inventories rose 0.9% to a two-week high of 12.1 million barrels in the week to Dec. 15, according to Enterprise Singapore data.

The January crack is lower at $12.25/ bbl.

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

Asian refining margins for 10 ppm gasoil slipped on Thursday as feedstock crude prices firmed, while cash differentials lingered close to their strongest levels in over a month as traders expect a larger rebound in industrial demand in 2022.

Refining margins or cracks for 10 ppm gasoil were at $13.38 a barrel over Dubai crude during Asian trading hours, compared with $13.97 per barrel a day earlier.

Cash premiums for gasoil with 10 ppm sulphur content rose to 65 cents per barrel to Singapore quotes on Thursday, up from 62 cents per barrel on Wednesday.

India’s gasoil sales in the first half of December rose from November and compared to the same period last year, preliminary sales data showed on Thursday, reflecting a pick up in industrial activity in the world’s third-biggest oil consumer. 

Gasoil sales by the country’s state fuel retailers were 2.87 million tonnes during Dec. 1-15, the data compiled by state-owned refiners showed, up 17.9% from the same period in November and up 3.3% from a year ago.

Singapore’s middle distillate inventories rose 8.5% to a three-week high of 8.04 million barrels in the week to Dec. 15, according to Enterprise Singapore data. Last week, the inventories had sunk to their lowest level since May 2018.

The January crack for 500 ppm Gasoil is lower at $12.30 /bbl with the 10 ppm crack at $13.30 /bbl. The regrade is at -$0.95 /bbl.

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) front-month refining margin climbed to its highest in nearly nine months on persistently tight supplies and low inventories across key storage hubs.

The front-month January VLSFO crack climbed to $15.51 a barrel above Dubai crude on Thursday, up from $14.71 a barrel on Wednesday for the December contract and its highest since Feb. 25, Refinitiv data in Eikon showed.

In another sign of tight supplies, backwardation in the front-month VLSFO time spread climbed to a two-week high of $15.75 a tonne on Thursday, up from $13.25 a tonne in the previous session, the data showed. 

Onshore fuel oil stocks in Singapore rose by 302,000 barrels, or about 48,000 tonnes, to 20.93 million barrels, or 3.3 million tonnes, in the week ended Dec. 15, Enterprise Singapore data showed. The residual fuel inventories extended the previous weeks’ gains, edging further away from a nine-week low of 19.82 million barrels in the week to Dec. 1. However, residual fuel stocks were 8% lower compared to the same period last year and well below the 2021 weekly average of 22.57 million barrels.

The January crack for 180 cst FO is higher at  -$5.85 /bbl with the visco spread at $1.20 /bbl.

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

No fresh trades 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.

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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