Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil bulls scored an eight straight winning week as Brent hit $85 per barrel, nearing Wall Street’s $90 call, as strong U.S. retail sales and a rebounding stock market fed risk appetite despite exploding inflation.

Brent crude settled up  68 cents, or 1%, at $84.86 after a three-year high at $85.09. Brent rose 3% on the week, for a sixth straight weekly gain that resulted in an accumulated gain of almost 17%. For the year, Brent was up 64%.

WTI crude settled up 97 cents, or 1.2%, at $82.28 per barrel. Earlier in the session, it peaked at $82.48, its highest since 2014. For the week itself, WTI rose 3.7% for an eight-straight weekly gain that gave the U.S. crude benchmark a cumulative gain of 32%. For the year, WTI was up almost 70%.

Oil’s latest run-up also came after US retail sales numbers for September released by the Commerce Department on Friday showed a growth of nearly 14% on the year and a steady monthly expansion of 0.7% since August.

Also ringing in oil bulls’ ears was the IEA’s estimate on Thursday that the energy crunch would leave the global market short of 500,000 barrels per day — estimated by some to be as high as 700,000 bpd.

News of China having cut crude oil import quotas for independent refiners and U.S. inventory data from Thursday pointing to a third straight weekly build in crude stockpiles were put on the backburner.

China’s GDP growth slowed down to 4.9% in the third quarter, down from 7.9%, over a property slump and an energy crisis.

The Baker Hughes oil rig count of active oil rigs in the US rose by 12 to 435.

At a global level, the death toll from the COVID-19 virus rose to 4.91 Million (+4,235 DoD) yesterday. The total number of active cases rose by 10,000 DoD to 17.86 million. (Click here for details).

Asia’s naphtha crack eased slightly from recent highs on Friday, after crude oil prices touched a fresh three-year peak, but the downside remained limited as European inventories dropped 16% amid strong petrochemical feedstock demand.

The crack slipped to $151.85 a tonne from $152.20 in the last session, and registered a weekly gain of 5%.

Naphtha stocks at ARA declined to 244,000 tonnes in the week to Oct. 14, from prior week’s 291,000 barrel, data from Dutch consultancy Insights Global showed.

The November crack is higher at $4.80 / bbl.

Asia’s gasoline crack also eased but remained strong above $12 a barrel after ARA stocks fell almost 5% last week.

The crack eased to $12.13 per barrel from $12.56 in the last session, and gained 21% on week.

ARA gasoline stocks fell to 748,000 tonnes last week from 785,000 tonnes prior week.

India’s  gasoline sales stayed above the pre-COVID levels at 1.05 million tonnes as people continued to prefer using personal vehicles over public transport for safety reasons, data from the government agency showed. October gasoline sales were up 8.3% from the same period in 2019 and rose by 2% from September, the data showed.

The November crack is higher at $12.60 / bbl.

 

Click Here for a graphical depiction of Global Gasoline stocks by region.

Asia’s cash differentials for 10 ppm gasoil rose to a fresh high of a premium of 53 cents per barrel to Singapore quotes on Friday. This was 10 cents higher than the previous day.

ARA gasoil inventories fell 2% to a three-week low of 1.99 million tonnes in the week ended Oct. 14, according to Dutch consultancy Insights Global.

India’s gasoil consumption fell in the first half of October from the same period in the previous year, preliminary sales data showed. Diesel sales by the country’s state fuel retailers, which own 90% of the country’s fuel outlets, came in at 2.4 million tonnes during Oct. 1-15, a decline of about 9.2% from last year and down 0.9% from the same period in 2019, the data showed. India has not yet fully opened its public transport sector, which mostly uses diesel.

Jet cash differentials rose by 1 cent to a premium of 2 cents per barrel premium.

Asia’s jet fuel refining margins slipped to $13.42 a barrel on Friday, but were just 8 cents shy of a near two-year high reached in the previous week, Refinitiv data in Eikon showed.

ARA jet fuel inventories rose 1% to a two-week of 875,000 tonnes, up from a near six-month low of 867,000 tonnes in the previous week.

The White House said it will lift COVID-19 travel restrictions for fully vaccinated foreign nationals effective Nov. 8, which should boost jet fuel demand.

The November crack for 500 ppm Gasoil is unchanged at $13.65 /bbl with the 10 ppm crack at $ 15.65 /bbl. The regrade is at -$ 0.20 /bbl. 

Click Here for a graphical depiction of Global Distillate stocks by region.

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack dropped on Friday, falling from a more than seven-month high in the previous session as crude oil prices extended gains.

The front-month VLSFO crack fell to $13.04 a barrel above Dubai crude, down from Thursday’s $13.98 a barrel and its highest since March 5, Refinitiv Eikon data showed.

ARA Fuel Oil stocks rose by 6%, or by 63,000 tonnes, to 1.11 million tonnes in the week ended Oct. 14, data from Dutch consultancy Insights Global (IG) showed. Compared with last year, however, the inventories at the ARA hub were 9% lower and below the five-year seasonal average of 1.2 million tonnes.

The November crack for 180 cst FO is lower at  -$2.85 /bbl with the visco spread at $1.40 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

No fresh trades for today. We shall hedge 1Q22 Nap-Dub crack is showing a value of $4.05 / barrel today. We shall also look to hedge the prompter cracks above $5.00 / bbl. 

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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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