Oil prices fell 1% on Thursday as new infections of the novel coronavirus continue to surge in the United States.
Brent crude futures settled at $43.37 a barrel, up 42 cents. U.S. West Texas Intermediate settled down 45 cents at $40.75 a barrel.
In a sign of recovery, China’s refinery daily crude oil throughput in June climbed 9% from a year earlier to 57.87 million tonnes (14.1 mbpd), reaching its highest level on record due to rising consumption.
The Russian Energy Minister said on Thursday he expected global oil demand to recover significantly in Aug’20 and improve to 10% below the levels seen prior to the coronavirus crisis, from 25% below pre-crisis levels in Apr’20.
Talks over the sale of a 20% stake in Reliance’s oil-to-chemical business to Saudi Aramco have stalled over price. Aramco wants the Reliance to review the $15 billion it agreed to sell the stake for last year with the energy market hit hard by falling demand.
At a global level, the death toll from the COVID-19 virus rose to 591,962 (+5,741 DoD) yesterday, with the total number of confirmed infections at 13,937,798 (+248,913 DoD). (Click here for details).
Asia’s naphtha crack fell to a near three-week low of $66.05 a tonne and is now only at a very slight premium over Brent crude as buyers continue to replace a portion of their fuel feedstock with LPG.
The August crack is lower at -$ 0.90 /bbl
Asia’s gasoline crack eased to a two-session low of $1.94 a barrel premium to Brent as ample stocks weighed.
Although gasoline stockpiles in Singapore eased, the levels remained sharply higher than a year ago. Singapore’s onshore light distillates inventories eased 486 KB barrels to 16.07 million barrels in the week to Wednesday. A year ago, the levels stood at 10.16 million barrels.
The August crack is lower at $2.50 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s cash differentials for jet fuel weakened on Thursday as regional airlines kept majority of their international flights grounded, while some governments suspended travel routes due to a renewed wave of coronavirus infections.
Cash discounts for jet fuel were at 37 cents a barrel to Singapore quotes, compared with a 30-cent discount a day earlier. The jet spot differentials, which are currently at their weakest seasonal levels in three years, have found some support over the last two months as flights between domestic destinations resumed. But the aviation fuel market will continue to struggle as long as long haul flights remain out of operations.
Refining margins or cracks for jet fuel rose 72 cents to $1.92 a barrel over Dubai crude during Asian trade on Thursday as crude oil prices eased.
The August crack for 500 ppm Gasoil is higher at $5.75 /bbl with the 10 ppm crack at $ 6.55 / bbl. The regrade is at -$ 3.80 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
The front-month contango structure for Asia’s 0.5% VLSFO was at its narrowest in nearly five months, supported by improved demand and hopes of an easing oversupply.
The Aug/Sept VLSFO time spread firmed to minus $2.25 a tonne on Thursday, up from a $3.25 per tonne discount in the previous session and its narrowest since March 3.
Meanwhile, Singapore’s residual fuel oil inventories slipped 2% in the week to July 15 despite higher net import volumes and persistently sluggish marine fuel demand.
The August crack for 180 cst FO is higher at – $2.65 /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.
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.