Crude Oil
Oil prices continued to stay buoyant amid thin trade in light of the upcoming year end. Brent crude settled 37 cents higher at $66.54 a barrel, and WTI oil rose 29 cents to $61.22 a barrel.
In a further sign of thawing relations between the US and China, China’s finance ministry on Thursday published a new list of six U.S. products that will be exempt from tariffs starting on Dec. 26. However, if U.S. and Chinese officials fail to provide concrete details about their efforts to reach a trade agreement, oil prices could lose their upward momentum.
News of President Donald Trump’s impeachment by the U.S. House of Representatives failed to stir the oil market.
Naphtha
No fresh news on the Naphtha markets.
The January crack is higher at – $ 3.75 / bbl.
Gasoline
Asia’s gasoline crack on Thursday recovered from a near six-month low hit in the previous session, and snapped a five-day losing streak, amid hopes that refinery turnarounds in the Middle East will help draw on Asian supplies. The gasoline crack climbed to $4.84 a barrel, up from $4.329 a barrel on Wednesday. This came despite firm export volumes of Chinese gasoline as well as higher-than-expected U.S. inventories of the fuel.
Light distillate stocks in Singapore fell by 657 KB to 12.57 million barrels in the week ended 18th December, data from Enterprise Singapore showed.
The January crack is lower at $ 6.50 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash premiums for 10 ppm gasoil rose for a fifth straight session on Thursday to 74 cents per barrel over Singapore quotes, up from 70 cents per barrel on Wednesday.
The front-month time spread for 10 ppm gasoil, which has widened its backwardated structure by 67% over the past couple of weeks, traded at a premium of 35 cents a barrel.
Cash discounts for jet fuel widened to 12 cents per barrel to Singapore quotes, compared with a 8-cent discount on Wednesday.
Middle distillate stocks in Singapore rose by 162 KB to 10.87 million barrels in the week ended 18th December, data from Enterprise Singapore showed.
The January crack for 500 ppm Gasoil is steady at $ 14.65 /bbl with the 10 ppm crack at $ 15.45 / bbl. The regrade is at $ 0.40 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Front-month time spreads of both 0.5% very low-sulphur fuel oil (VLSFO) and high-sulphur fuel oil (HSFO) widened on Thursday in a sign of shrinking supplies of both fuel grades ahead of the IMO’s 2020 deadline capping the sulphur content of marine fuels.
While suppliers have for months stockpiled VLSFO in perpetration of the new rules, firm demand, domestically and abroad, has eaten away at inventories of the fuel.
Underscoring this, Singapore’s residual fuel oil inventories posted a second weekly decline, 8% to an 11-week low of 19.72 million barrels in the week to Dec. 18 amid persistently weak net import volumes.
Trade sources estimated there were about 7-8 million tonnes of VLSFO supplies and its blend components in floating storage around the Singapore bunkering hub but that a significant amount of these were unfinished and required blending into on-specification bunker.
The January 180 cst crack is higher at -$ 18.70 / 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.