Crude Oil
Crude oil prices settled largely unchanged from Monday’s end of day as wintry conditions hit production in Texas, the biggest energy producing state in the United States.
Brent settled at $63.12 /bbl, down 18 cents. WTI crude settled at $60.05 /bbl, up 58 cents from its settle on Friday.
The deep freeze that hit Texas over the weekend has knocked out roughly 4 MB/D of refining capacity, more than 20% of national capacity, and shuttered a key shipping channel in Houston.
“Based on the technical outlook, oil prices could rally to $70-72/barrel, which are the peaks of September 2019 and January 2020. However, based on fundamental analysis, the case for further price gains is hard to make, although we are seeing optimism in financial markets in general,” said analysts at ABN Amro, in a research note.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,428,314 (+9,777 DoD) yesterday. The total number of active cases fell by around 140,000 DoD to 22.76 million. (Click here for details)
Naphtha
Asia’s Naphtha crack strengthened, rebounding to $92.15 per tonne, compared with $90.2 per tonne in the previous session.
Total naphtha flows into Asia for February have been notionally assessed at 5.5-5.6 million metric tonnes (mt), edging down by 6% from January’s revised total of 5.9-6 million mt and also lower compared with 2020’s monthly average of 5.8 million mt, assessments by Refinitiv Oil Research showed.
The March crack is lower at $0.25/bbl
Gasoline
Asia’s gasoline crack rose for a second straight session to $4.37 per barrel, the highest since Feb. 8, from $3.31 per barrel a day earlier.
Indian state refiners’ gasoline sales in the first two weeks of Feb’21 fell below pre-pandemic levels, while diesel sales were down 8.6% YoY, as gasoline and gasoil prices in India have risen to a record high, hitting consumption.
The March crack is higher at $5.85 /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 narrow premium of 2 cents a barrel to Singapore quotes, just one cent higher than on Monday.
Asian refining margins for 10 ppm gasoil also rose on Monday, hovering close to multi-month highs touched last week, buoyed by expectations for firmer demand and tighter supplies in coming months.
The regional gasoil market is expected to strengthen further as countries roll out wider vaccinations in coming days that would boost economic recovery and fuel demand, market watchers said.
Cash differentials for jet fuel were at a discount of 11 cents per barrel to Singapore quotes, compared with a 10-cent discount a day earlier.
Asian refining margins jet fuel jumped on Tuesday, hitting their highest level in more than 11 months, buoyed by an increasing number of scheduled flights. The cracks have surged 29% in the last two weeks.
The number of scheduled flights operating globally were at about 373,000 in the week ended Monday, up from about 346,000 a week earlier, according to aviation data firm OAG. “Total Chinese capacity is now sitting at 12.9 million seats this week, up from 8.9 million seats last week, and significantly up on the same week last year, where capacity had fallen to just 4.7 million seats at the beginning of the COVID-19 crisis,” OAG said in a statement.
The March crack for 500 ppm Gasoil is lower at $6.10 /bbl with the 10 ppm crack at $ 7.30 / bbl. The regrade is at -$ 1.20 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack edged higher amid muted trade on Tuesday, climbing by 43 cents a barrel to $14.89 a barrel above Dubai crude oil prices, according to Refinitiv data in Eikon.
The front-month HiLo spread climbed to $116.50 a tonne on Monday, up 50 cents from the previous session and near an 11-month high of $120 a tonne on Tuesday.
The March crack for 180 cst FO is lower at -$3.40 /bbl with the visco spread at $0.90 /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.