Crude Oil
Oil rose for a fifth day on Monday, on track for its strongest first quarter in eight years. Brent crude gained 16 cents to end the day at $66.41 a barrel. WTI crude rose 47 cents to $56.06 a barrel.
The narrative of a positive end to the US China trade dispute still rules the waves with the OPEC + cuts acting as strong support to the same.
The broader financial markets eased a little after data showing a drop in Chinese car sales in January raised concerns about the world’s second-largest economy. Some of this weakness rubbed off on the oil market, but the overall trend in crude prices remained convincingly upwards for now.
Naphtha
Asia’s naphtha crack was at a two-session low of $38.15 a tonne on Monday, weighed down by high crude oil prices and weak gasoline fundamentals.
Naphtha demand from the petrochemical sector, however, has remained firm. South Korea’s Lotte Chemical came forward to buy naphtha for delivery in the second half of March at premiums in mid-single digits per tonne to Japan quotes for cost and freight (C&F). Several buyers were seeking naphtha last week for the second half of March, including Singapore, Malaysia, Taiwan and South Korea.
Japan imported 1.14 million tonnes of naphtha in January, its lowest monthly imports since September 2018. Ethylene production at about 580,000 tonnes for December, however, was its highest since January 2018.
Taiwan, Singapore, Malaysia and South Korea in total had bought at least 180,000 tonnes of naphtha for second-half March delivery over a period of less than 3 days. Formosa bought some 100,000 tonnes after skipping purchases of the open-specification grade fuel for first-half March delivery.
The March crack is higher at -$ 7.25 /bbl
Gasoline
Asia’s gasoline crack remained at discounts to Brent crude as excess supply remained an issue. Unusual demand from India was too small to turn the market around for gasoline, which also uses naphtha as a blending component. India’s BPCL bought 35,000 tonnes of gasoline for first-half March arrival at Kochi in a rare move to cater to demand.
The March crack is lower at $ 0.50 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10ppm sulphur content were at a discount to 37 cents a barrel to Singapore quotes, compared with a discount of 35 cents a barrel on Friday.
Cash discounts for jet fuel narrowed by a cent to 27 cents a barrel to Singapore quotes on Monday. J
The physical market for jet fuel in the Singapore window remained muted with no bids or trades on Monday.
The March crack is lower at $ 14.45 /bbl with the 10 ppm crack at $15.45 /bbl. The regrade is at – $ 0.05 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash premiums of Asia’s 380-cst high-sulphur fuel oil (HSFO) dipped to their lowest since mid-June on Monday as plentiful near-term supplies weighed on market sentiment.
Cash premiums for 380-cst HSFO were at $2.17 a barrel to Singapore quotes, a fresh low since June 13 last year. They were at a premium of $2.61 a barrel on Friday.
The March180 cst crack has dropped to $ 0.65 / bbl with the visco spread at $ 0.45 /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.