Crude Oil
Crude prices jumped in the US as Texas struggled with a fifth day of power black outs.
Brent settled up 99 cents, or 1.6%, at $64.34, after setting a 13-month high of $64.74. Brent is up almost 25% on the year.
WTI crude settled up $1.09, or 1.8%, at $61.14 per barrel. It earlier hit a session peak of $61.27, its highest since January 2020. WTI has risen more than 26% year-to-date.
Analysts estimated at least 2 million barrels per day (bpd) of U.S. shale oil production had been curtailed by the Texas storm.
Operations at the Houston ship channel resumed at 9:30 a.m. local time on Wednesday with very light traffic as Texas continues to grapple with a cold snap. The channel was shut on Sunday as Texas fell into the grip of a historic deep freeze.
Saudi Arabia’s crude oil exports rose for a sixth straight month to an eight-month peak in Dec’20 of 6.495 MB/D, while refinery throughput fell by 0.4% to 2.33 MB/D and direct crude burn dropped by 53 KB/D to 267 KB/D, official data showed.
Saudi Arabia plans to increase oil output in the coming months, reversing a recent production cut, and is expected to announce its plans in the meeting next month, adding that the output rise won’t kick in until Apr’21,l the WSJ reported.
Kuwait’s KPC is in talks to shorten its annual supply deals with some customers in India and Japan to nine months this year to meet demand from its new refinery, sources close the matter told Reuters.
Hedge Recommendations
The API reported another huge crude draw this week. However, it is not clear what is to be made of this information in the light of the situation in Texas. Gasoline inventories continued to rise. Crude production was reported to be up to 11 mb/d last. week.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,439,814 (+11,340 DoD) yesterday. The total number of active cases fell by around 100,000 DoD to 22.66 million. (Click here for details)
Naphtha
Asia’s naphtha crack rose for a second straight session to $92.78 per tonne, compared with $92.15 per tonne in the previous session.
The March crack is higher at $0.70 /bbl
Gasoline
Asia’s gasoline crack fell to $4.17 per barrel, from $4.37 per barrel a day earlier.
Light Distillate stocks in Fujairah rose by 208 KB to 7.2 million barrels.
The March crack is higher at $6.55 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10 ppm sulphur content flipped back into a discount of 5 cents a barrel on Wednesday. They were at a narrow premium of 2 cents a barrel to Singapore quotes on Tuesday.
Indonesia’s gasoil imports in 2020 slipped 8.74% YoY, a sharp slowdown from the 33.4% decline seen in 2019, latest data from Statistics Indonesia showed.
Middle-distillate inventories in the Fujairah Oil Industry Zone slipped 5.4% to 4.2 million barrels in the week ended Feb. 15, data via S&P Global Platts showed.
Cash differentials for jet fuel were at a discount of 14 cents per barrel to Singapore quotes, compared with a 11 cents per barrel a day earlier.
Seasonal heating demand for kerosene would soften gradually as the peak winter months in North Asia come to a close in coming weeks, and market watchers are concerned the jet fuel market might remain under pressure until aviation demand picks up substantially.
Temperature levels in Tokyo and Seoul are expected to stay mostly above normal for the next 15-day period, weather forecast models on Refinitiv Eikon showed.
The March crack for 500 ppm Gasoil is higher at $6.25 /bbl with the 10 ppm crack at $ 7.30 / bbl. The regrade is at -$ 1.35 /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) market eased on Wednesday amid muted trade activity but market fundamentals remain supportive as demand holds firm and supplies remain thin, trade sources said.
VLSFO cash differentials slipped by 10 cents/ MT to $3.78 /MT.
180 cSt HSFO cash differentials dropped by 22 cents to $1.01 / MT while the 380 cSt HSFO differentials flipped into a discount of $0.16 /MT, a drop of 41 cents.
Fujairah Oil Industry Zone inventories for heavy distillates and residues fell by 299,000 barrels, or about 47,000 tonnes, to 9.487 million barrels, or 1.494 million tonnes, data via S&P Global Platts showed.
The March crack for 180 cst FO is lower at -$3.55 /bbl with the visco spread at $0.85 /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.
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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.