Crude Oil
Oil prices continued to climb on Thursday and touched a nine month high.
Brent crude futures for February settled 42 cents higher at $51.50 a barrel, while WTI futures settled up 54 cents at $48.36 a barrel.
We see this rise in prices as a combination of a weakening US dollar as well as exiting of shorts.
U.S. lawmakers edged closer to agreement on a $900 billion virus-relief spending package on Wednesday.
Saudi Arabia’s crude oil exports rose for the 4th straight month to 6.16 MB/D in Oct’20 from 6.07 MB/D in Sep’20, official data showed on Thursday. Saudi domestic crude refinery throughput also rose by 2% to 2.4 MB/D in Oct’20.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,667,440 (+12,830 DoD) yesterday. The total number of active cases rose by around 240,000 DoD to 20.75 million. (Click here for details).
Naphtha
Asia’s naphtha crack hit a two-month high of $85.13 a tonne on Thursday as prompt supplies tightened on the back of firm demand and lower refinery throughput.
Naphtha market fundamentals turned in favour of the sellers this month, with spot prices rising to almost mid-teens a tonne to Japan quotes on a cost-and-freight (C&F) basis in South Korea this week versus discounts in November.
The January crack is higher at $1.05 /bbl.
Gasoline
Asia’s gasoline crack rose to a three-session high of $2.55 a barrel but petrol remains under pressure due to ample supplies.
Singapore light distillates inventories rose 287 KB to a five-week high of 12.72 million barrels in the week to Dec. 16, data from Enterprise Singapore showed. This was about 3.7% higher versus a year earlier. China’s gasoline output at 11.74 million tonnes in November, on the other hand, was down 0.7% versus a year earlier.
The January crack is higher at $3.55 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for jet fuel were at a discount of 14 cents a barrel to Singapore quotes on Thursday, compared with a discount of 12 cents per barrel a day earlier.
Refining margins for jet fuel climbed 28 cents to $5.16 per barrel over Dubai crude during Asian trade on Thursday, the strongest since March 13. Cracks for the aviation fuel have surged about 98% in the last month.
Singapore’s middle distillate inventories rose 3% to 15.5 million barrels in the week to Dec. 16, according to Enterprise Singapore data. Weekly Singapore middle distillate inventories have averaged about 13.8 million barrels in 2020. This week’s stocks were 42.6% higher from a year ago.
The January crack for 500 ppm Gasoil is higher at $5.60 /bbl with the 10 ppm crack at $ 6.40 / bbl. The regrade is at -$ 0.45 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s cash premiums for 380-cst HSFO climbed to $2.01 per tonne to Singapore quotes, the strongest since Dec. 3. It was at a premium of $1.79 per tonne on Wednesday.
The January/February time spread for the 380-cst HSFO in Singapore widened its backwardation to trade at a premium of $2.25 per tonne.
The 380-cst HSFO barge crack for January traded at a discount of $5.87 a barrel to Brent, compared with minus $6.02 a barrel on Wednesday.
Cash discount for Asia’s 0.5% VLSFO was at $1.06 a tonne to Singapore quotes on Thursday, compared with a discount of $1.30 per tonne on Wednesday.
Singapore’s onshore fuel oil stocks rose 2.1% to 22.8 million barrels in the week to Dec. 16, according to the Enterprise Singapore data. Weekly fuel oil inventories have averaged 23.9 million barrels so far this year, having averaged about 21 million barrels a week last year. Onshore fuel oil inventories were up 15.8%, compared with year-ago levels.
The January crack for 180 cst FO is higher at -$1.30 /bbl with the visco spread at $0.80 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
We will hedge one more tranche of January Jap-Nap – Dubai crack at current levels of $1.05 per barrel.
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.