Oil prices edged lower on Friday, dragged down by concerns that a spike in COVID-19 cases in the United States and Europe will continue to drag down demand.
Brent crude futures fell 23 cents to settle at $42.93 a barrel, and WTI crude futures dropped 8 cents to settle at $40.88 a barrel.
Brent rose 0.2% for the week, while WTI was on track to gain 0.7%.
The OPEC+ group fears a prolonged second wave of the COVID-19 pandemic and a jump in Libyan output could push the oil market into surplus next year, according to a confidential document seen by Reuters, a gloomier outlook than just a month ago.
China has hit the brakes on its oil buying spree as swelling inventories and limited import quotas stifle purchases. China’s imports may now fall as much as 1.7 MB/D in Q4’20, or 14.5% QoQ from Q3’20, according to IHS Markit.
In the United States, drillers have begun adding oil rigs since cutting them to a 15-year low in August. This week, they added the most oil rigs in a week since January, increasing the count by 12 to 205.
Money managers cut their net long U.S. crude futures and options positions by 9,442 contracts to 288,454 in the week to Oct. 13, the U.S. CFTC said on Friday.
At a global level, the death toll from the COVID-19 virus rose to 1,118,167 (+3,971 DoD) yesterday. The total number of active cases rose by around 340,000 over the weekend to 9.04 million. (Click here for details).
Asia’s naphtha crack ended the week at a fresh 1-1/2 month low of $78.45 a tonne on Friday as ample supplies weighed.
The November crack is lower at $ 1.90 /bbl
Asia’s gasoline premium to Brent crude edged up 6 cents at $2.36 a barrel but this was down by more than half compared with the start of the month as more supplies were seen in Singapore.
Gasoline inventories at ARA were also lower, hitting a three-month low of about 1.24 million tonnes in the week to Thursday.
The November crack is lower at $ 2.75 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s benchmark 10ppm diesel crack edged up 1 cent to a three-session high of $3.87 a barrel on Friday, as stronger demand in India and falling Europe, U.S. stockpiles countered higher inventories in Singapore.
India’s gasoil sales rose in October for the first time since the nation imposed COVID-19 restrictions in late March, preliminary data showed, signalling a pick-up in industrial activity ahead of key festivals.
Gasoil stocks held at ARA eased 3% in the week to Thursday to reach a two-week low of 2.78 million tonnes. The current gasoil inventories were 0.85% lower than a year earlier.
The November crack for 500 ppm Gasoil is higher at $2.75 /bbl with the 10 ppm crack at $ 3.55 / bbl. The regrade is at -$ 1.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s 0.5% VLSFO crack extended gains on Friday, edging up to a near six-month high of $9.33 a barrel above Dubai crude.
Residual fuel inventories at ARA fell 9% from the previous week to a four-week low of 1.212 million tonnes in the week ended Oct. 15. Compared with last year, however, the inventories at the ARA hub were 25% higher and were above the five-year seasonal average of 1.021 million tonnes.
The November crack for 180 cst FO is higher at $0.10/bbl with the visco spread at $1.25 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh activity 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.
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.