Crude Oil
Oil prices continued their slow downward movement on Monday as Covid 19 cases surged unabated.
Brent crude futures fell 31 cents to settle at $42.62 a barrel, and WTI crude futures dropped 5 cents to settle at $40.83 a barrel.
Saudi Arabia, the biggest member of the OPEC, said no one should doubt the group’s commitment to providing support.
Saudi Arabia’s crude oil exports rose for a second consecutive month to 5.97 MB/D in Aug’20, from 5.73 MB/D in Jul’20, while the country’s crude output rose by 500 KB/D to 8.98 MB/D in Aug’20, the official figures showed.
14% of oil refineries in advanced economies risk closure by 2030, according to the IEA, with an increasing number of owners choosing alternative paths such as switching to cleaner biofuels by processing vegetable oil and waste oils.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,122,758 (+4,389 DoD) yesterday. The total number of active cases rose by around 120,000 over the weekend to 9.16 million. (Click here for details).
Naphtha
Asia’s naphtha crack fell for the fourth straight session on Monday to hit a 7-week low of $70.80 a tonne as ample supplies dragged.
Asia is expected to receive some 2 million tonnes of naphtha next month from Europe, the Mediterranean and the United States.
The November crack is lower at $ 1.35 /bbl
Gasoline
Asia’s gasoline crack was at a two-session low of $2.34 a barrel, down by more than half compared to $5.84 a barrel on Sept. 28 when it was at a 6-1/2 month high.
Gasoline exports from Northwest Europe to the U.S. East Coast are expected to reach 461 KT in October so far. That is around half of total monthly exports a year ago.
The November crack is steady at $ 2.75 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s benchmark 10ppm diesel crack fell to an almost three-week low of $3.43 a barrel on Monday as high supplies countered demand in India and China.
China’s refinery throughput in September dipped from the heady levels of the previous two months, with the country having processed 57.35 million tonnes of oil last month, according to data from the National Bureau of Statistics (NBS).
Global airline capacity in week beginning 19 Oct’20 was down 2.1%, or 1.3 million passenger seats, WoW, according to OAG said. Global airline capacity stood at 56.6 million seats, compared with 111.2 million seats last year.
The November crack for 500 ppm Gasoil is lower at $2.10 /bbl with the 10 ppm crack at $ 2.90 / bbl. The regrade is at -$ 1.65 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO eased on Monday, pulling back from a six-month high in the previous session. The front-month VLSFO crack slipped to $8.92 a barrel above Dubai crude.
The firm VLSFO refining margin comes as prompt supplies of the fuel tighten amid limited arbitrage supplies into the Singapore hub.
The November crack for 180 cst FO is lower at -$0.10/bbl with the visco spread at $1.25 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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.