Crude Oil
Oil fell about 2.5% a barrel on Thursday, weighed down by weakness in U.S. equities markets. Brent crude futures were down $ 1.73 cents to settle at $61.93 a barrel. WTI crude futures fell $ 1.48 cents to settle at $55.30 a barrel.
The longer-term outlook for oil has also grown increasingly bearish, market participants said on Thursday.
The IEA is reducing its 2019 oil demand forecast due to a slowing global economy amid a US-China trade spat, its executive director said on Thursday. 2019’s growth forecast has been revised down to 1.1 MB/D from 1.2MB/D in June.
Venezuelan state oil company PDVSA partly restarted activity at its 645 KB/D Amuay refinery where a blackout halted operations in early July, four sources with knowledge of the matter said, though it remained well below capacity
Crude rose early in the session after Iran said it had seized a foreign tanker in the Gulf. Prices pulled back after it emerged that the vessel had only a small cargo and was detained on Sunday for fuel smuggling. Britain pledged to defend its shipping interests in the region, and U.S. Central Command chief General Kenneth McKenzie said the United States would work “aggressively” to enable free passage after recent attacks on oil tankers in the Gulf. Iran said the vessel impounded was the one it towed on Sunday after the ship had sent a distress call.
We are now growing suspicious that news like this crops up the moment oil prices dip. This is the third time in a row we have seen it and the coincidence looks too good to be true.
Naphtha
No fresh news on the Naphtha markets.
The August crack is higher at -$ 5.35 /bbl
Gasoline
Asia’s gasoline crack rose for a third day to hit $7.95 a barrel on Thursday as inventory levels fell for a fourth straight week.
Singapore’s onshore light distillates stock plunged by 1.146 million barrels to a near 9-1/2 month low of 10.163 million barrels in the week to July 17.
There was no record of India exporting any gasoline to Singapore while Taiwan’s petrol exports to Singapore at 22,257 tonnes were 80 percent lower than the week before. India is undergoing heavy refinery maintenance and upgrade works as the country prepares itself for cleaner fuels from 2020.
Some 90 KT of gasoline will be moved out of Asia to Mexico this month by China’s WEPEC.
The August crack is higher at $ 8.35 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10ppm gasoil were at a premium of 20 cents a barrel to Singapore quotes, compared with a premium of 14 cents a barrel on Wednesday.
Cash premiums for jet fuel were at 12 cents a barrel to Singapore quotes on Thursday, compared with a 13-cent premium a day earlier. The physical market for jet fuel in Singapore trading window remained muted with no offers or deals on Thursday.
Middle distillate stocks in Singapore dropped by 392 kb to 9.86 million barrels
The August crack for 500 ppm Gasoil is higher at $ 16.00 /bbl with the 10 ppm crack at $ 16.70 / bbl. The regrade is at +$ 0.20 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s fuel oil market firmed on Thursday with 380-cst high-sulphur fuel oil (HSFO) cash premium and the August crack to Brent crude extending gains.
This came as fuel oil inventories in Singapore fell to a six-month low in the week ended July 17, marking five straight weeks of declines.
The August 180 cst crack has strengthened further to + $ 2.15 / bbl with the visco spread at $ 1.45 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
The rapid return in strength of the 180 cSt – Dubai crack prompts us to put on one more hedge for August at current values of + $ 2.15 /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.