Crude Oil
Oil prices rose more than 2 percent to their highest this year on Friday after an outage at Saudi Arabia’s offshore oilfield boosted expectations for tightening supply. Brent crude gained $ 1.68 to settle at $66.25 a barrel. WTI crude rose $ 1.18 to settle at $55.59 a barrel.
For the week, Brent ended more than 6 percent higher and WTI gained more than 5 percent.
The partial closure of Saudi Arabia’s Safaniya, the world’s largest offshore oilfield, occurred about two weeks ago. Safaniya has production capacity of more than 1 million barrels per day. It was not immediately clear when the field would return to full capacity.
Security threats could threaten Nigerian production after general elections this weekend.
Progressing U.S.-Sino trade talks also strengthened demand sentiment. They will restart next week in Washington, with both sides saying this week’s negotiations in Beijing showed progress.
However, prices pared gains after a report showed U.S. energy firms this week increased the number of oil rigs operating for a second week in a row. The number of active oil rigs in the US increased by 3 to 857.
Naphtha
Asia’s naphtha crack ended the week at a two-session high of $39.35 a tonne as a string of demand gave some support to the market this week.
Taiwan, Singapore, Malaysia and South Korea in total had bought at least 180,000 tonnes of naphtha for second-half March delivery over a period of less than 3 days. Formosa bought some 100,000 tonnes after skipping purchases of the open-specification grade fuel for first-half March delivery.
The March crack is slightly higher at -$ 7.50 /bbl
Gasoline
ARA gasoline inventories dipped by 79 KT to 1.26 million tonnes. While this is the second consecutive week of draws, s
The March crack continued its recovery and is now valued at $ 0.65 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10ppm sulphur content narrowed their discounts to 35 cents a barrel to Singapore quotes, compared with a discount of 39 cents per barrel a day earlier.
The front-month time spread for 10ppm gasoil, which has remained in a contango market structure since November last year, has narrowed by about 72 percent in the last two weeks, and was at a discount of 9 cents a barrel on Friday.
Gasoil Stocks in ARA rose by 139 KT in the week to Feb. 14 to 2.54 million tonnes.
Cash discounts for jet fuel were at 28 cents a barrel to Singapore quotes on Friday, compared with a discount of 30 cents a barrel on Thursday.
The March crack has improved to $ 14.65 /bbl with the 10 ppm crack at $15.60 /bbl. The regrade is at – $ 0.05 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Fuel oil refining margins eased on Friday amid firmer crude oil prices, while cash premiums for the mainstay 380-cst high-sulphur fuel oil slipped to a fresh eight month low.
The more actively-traded 380-cst barge crack to Brent crude for February slipped to minus $2.55 a barrel during Asian trading hours. It was at minus $2.45 per barrel on Thursday.
Asia’s 180-cst fuel oil crack to Dubai crude slipped to 55 cents a barrel, compared with $1.44 per barrel a day earlier. Cash premiums for 380-cst high-sulphur fuel oil (HSFO) dropped to $2.43 a barrel to Singapore quotes, levels not seen since June 2018. They were at a premium of $2.61 a barrel on Thursday.
Fuel oil stocks in ARA rose by 82 KT in the week to Feb. 14 to 1.09 million tonnes.
The March180 cst crack has dropped to $ 1.00 / bbl with the visco spread at $ 0.50 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh hedges 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.
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.