Crude Oil
Oil rose about 1% on Thursday, as the U.S. Senate approved a revamp of the NAFTA agreement between the US, Canada and Mexico. Brent futures gained 62 cents to settle at $64.62 a barrel. WTI crude rose by 71 cents to settle at $58.52 per barrel.
The oil benchmark prices were also supported by a report from the Federal Reserve Bank of Philadelphia showing strong manufacturing activity in the U.S. Mid-Atlantic region and as Wall Street stock indexes scaled new records. The S&P 500 touched a record high.
Price gains were capped earlier as the International Energy Agency said it expected oil production to outpace demand for crude from OPEC, even if members comply fully with a pact with Russia and other non-OPEC allies to curb output.
China’s economy grew 6.0% in the Q4’19 from a year earlier, official data showed on Friday, in line with expectations and unchanged from the previous quarter’s pace, hovering at the weakest pace in nearly three decades.
Naphtha
Asia’s naphtha front-month crack for first-half March fell to a four-session low of $89.82 a tonne on Thursday, dragged down by a cracker outage in Japan that came at a time of cracker run cuts across Asia.
Asahi Kasei Mitsubishi Chemical Ethylene Corp, a joint venture of Asahi Kasei Corp and Mitsubishi Chemical Corp, has suspended operations at its 567 kp tonnes per annum naphtha cracker in Mizushima, Japan, on Tuesday after a malfunction in the refrigerant system. The timing to restart operations will be finalised after a detailed inspection on the cracker.
Demand from end-users was mostly muted following a string of purchases since Jan. 7. Taiwan’s Formosa Petrochemical Corp and the Philippines’ JG Summit were two of the most recent buyers having bought cargoes for February delivery. Formosa, Asia’s top naphtha buyer, paid a premium of about $20 a tonne to its own price formula on a C&F basis for 50 KT of open-specification naphtha for Feb. 21-29 arrival at Mailiao. It had on Dec. 20 paid a premium in the low $20s a tonne for 100,000 tonnes of similar grade scheduled for Feb. 11-20 arrival. JG Summit paid a premium of mid-high teens level a tonne for 30 KT scheduled for February arrival at Batangas.
ADNOC offered 50 KT of naphtha for mid-February loading from Ruwais. It has previously sold a cargo for end-January loading at premiums in the $30s a tonne level to its own price formula on an FOB basis.
The January crack is higher at – $ 2.85 / bbl.
The February crack is at – $ 3.10 / bbl.
Gasoline
Asia’s gasoline crack, similar to naphtha, also fell, hitting a five-session low of $4.56 a barrel on ample supplies.
Singapore’s light distillates inventories 1.070 million barrels to reach near a 9-month high of 13.132 million barrels in the week to Wednesday.
China’s CNOOC was looking to sell up to 38,000 tonnes of 92-octane gasoline for Feb. 20-21 loading from Huizhou through a tender.
The January crack is lower at $ 4.85 /bbl
The February crack is at 6.35/ bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10 ppm gasoil dipped 2 cents to 27 cents per barrel over Singapore quotes on Thursday, their lowest since Dec. 2.
The front-month time spread for 10 ppm gasoil traded at a premium of 19 cents a barrel on Thursday.
Cash premiums for jet fuel edged higher to 13 cents a barrel over Singapore quotes, compared with a premium of 11 cents on Wednesday.
Middle-distillate inventories in Singapore rose by 475 kb to 10.12 million barrels.
The January crack for 500 ppm Gasoil is lower at $ 10.25 /bbl with the 10 ppm crack at $ 10.75 / bbl. The regrade is at -$ 0.30 /bbl
The February crack for 500 ppm Gasoil is at $ 11.55 /bbl with the 10 ppm crack at $ 12.05 / bbl. The regrade is at -$ 0.00 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month crack for 0.5% VLSFO slipped to a near two-week low on Thursday amid limited liquidity in the Singapore trading window. VLSFO cash premiums dropped to $19.09 per tonne, the lowest since Jan. 6, down from $22.70 a tonne in the previous session.
Global supplies of marine fuel compliant with new environmental rules are increasing fast as concerns over quality remain marginal, the International Energy Agency said on Thursday.
\Singapore’s residual fuel oil inventories jumped by 831 KB to 22.73 million barrels, a near seven-month high in the week to Jan. 15, boosted by soaring net imports of the fuel which hit a near 1-1/2 year high. Compared with the same period last year, residual fuel stocks were 24% higher.
The January 180 cst crack has improved to -$ 13.55 / bbl with the visco spread at $ 2.20 /bbl.
The February 180 cst crack is at -$ 13.60 / bbl with the visco spread at $ 2.20 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action 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 refiner.
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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.