Crude Oil
Oil prices stayed firm on Wednesday after U.S. government data showed a decline in crude inventories. Brent crude settled 7 cents higher at $66.17 a barrel, and WTI oil dropped 1 cent to $60.93 a barrel.
Oil prices steadied and on expectations for an uptick in demand next year on the back of progress in resolving the U.S.-China trade fight. Brent futures gained 7 cents to settle at $66.17 a barrel while U.S. West Texas Intermediate (WTI) ended the session down 1 cent at $60.93 a barrel per barrel.
Oil pared losses after the data, which contradicted Tuesday’s report of a build of 4.7 million barrels in U.S. crude stockpiles from the API.
Donald Trump became the third US president to be impeached on Wednesday, as the House of Representatives formally charged him with abuse of power and obstruction of congress in a historic step that will inflame partisan tensions across a deeply divided America.
DOE data
U.S. crude fell by 1.1 million barrels in the week to Dec. 13 to 446.8 million barrels. Gasoline and distillate inventories grew last week by 2.5 million barrels to 237.3 million barrels, and 1.5 million barrels to 125.1 million barrels, respectively.
The draw in crude stocks was attributable almost entirely to a drop in net imports of over 500 kbpd. The builds in product stocks are at odds with our material balance statement.
Both gasoline and distillates showed a healthy rise in demand over the previous week. The drop in demand last week was attributed to heavy snowfall reducing travel. Our material balance suggests a draw rather than the healthy build reported.
Naphtha
Japan’s Naphtha stocks fell to 8.45 million barrels in the week to Dec. 14, down 6.7% from last week, and 5.6% lower from last year, statistics released by the Petroleum Association of Japan (PAJ) showed. .
The January crack is lower at – $ 4.55 / bbl.
Gasoline
Asia’s gasoline crack extended losses for a fifth straight session on Wednesday to touch a near six-month low of $4.32 a barrel, down from $4.59 a barrel on Monday, on higher global supply.
Light distillate stocks in Fujairah rose by 185 KB to 5.56 million barrels.
Gasoline stocks in Japan totalled 1.54 million barrels, up 4.2% from a week earlier, but was 6.6% lower from the same time last year.
The January crack is lower at $ 5.65 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10ppm gasoil climbed for a fourth consecutive session to 70 cents per barrel over Singapore quotes on Wednesday, 5 cents higher compared with Tuesday.
Cash differentials for jet fuel were at a discount of 8 cents per barrel to Singapore quotes, compared with a premium of 5 cents a barrel on Tuesday.
The front-month time-spread for the aviation fuel in Singapore widened by 2 cents to trade at a premium of 31 cents a barrel on Wednesday, indicating the market would likely firm up in the coming weeks.
The January crack for 500 ppm Gasoil has dropped to $ 14.60 /bbl with the 10 ppm crack at $ 15.40 / bbl. The regrade is at $ 0.40 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month 0.5% very low-sulphur fuel oil (VLSFO) crack rose to a record high premium of $27.73 a barrel against Dubai crude on Wednesday, extending gains for a fourth session and up from $26.55 in the previous session.
Meanwhile, residual fuel oil inventories Fujairah fell for a fourth straight week to a near three-month low of 11.17 million barrels in the week to Dec. 16.
The January 180 cst crack is higher at -$ 19.60 / bbl with the visco spread at $ 2.20 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Middle Distillate cracks have recovered strongly with 4Q20 Jet close to $19.00 /bbl. We shall hedge a tranche there should levels cross $ 19.00 / 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 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.