Crude Oil
Oil fell 1% on Thursday after the number of U.S. unemployment benefit claims rose unexpectedly, signaling a slow economic recovery.
Brent crude fell 47 cents to settle at $44.90 a barrel, while the expiring WTI fell 35 cents to $42.58 per barrel. The October contract settled 29 cents lower at $42.82 a barrel.
OPEC+ said on Wednesday the pace of the oil market recovery appeared to be slower than anticipated with growing risks of a prolonged second wave of the pandemic.
Some OPEC+ members would need to slash output by an extra 2.3 mil bpd to make up for their recent oversupply, an internal OPEC+ seen by Reuters shows.
Global markets also turned sour as the number of new U.S. claims for unemployment benefits rose back above 1 million last week.
Saudi crude exports plunge 17.3% from the month before to 4.98 mbpd in June, their lowest since at least January 2002 according to JODI data.
India’s crude oil imports fell 36.4% from a year earlier to 12.34 mil tonnes or 2.92 mil bpd according to official data, their lowest since March 2010 as fuel demand slowed amid renewed coronavirus-induced lockdowns and closures of refinery units for maintenance.
India IOC’s 300kbpd Paradip refinery is expected to restart by this Saturday, a few days’ delay due to shortage of workers amid COVID-19 pandemic.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 796,378 (+6,188 DoD) yesterday. The total number of active cases zoomed by 48,000 odd to 6,545,353. (Click here for details).
Naphtha
Asia’s naphtha crack hit a three-week high of $61.73 a tonne and is trading at a discount of less than 70 cents to Brent crude.
The September crack is higher at $1.10 /bbl.
Gasoline
Asia’s gasoline crack on Thursday reached a six-week high of $2.63 a barrel on stock draw downs in United States and Singapore.
Singapore’s onshore light distillates inventories fell 1 million barrels or about 6.4% to a two-week low of 14.83 million barrels in the week to Thursday, data from Enterprise Singapore showed. This is 40% higher compared with the same period last year when it was at 10.56 million barrels.
The September crack is higher at $4.30 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian refining margins for jet fuel flipped back to a negative territory on Thursday, lingering close to multi-week lows, as the coronavirus-related travel restrictions continue to upset passenger demand in the aviation sector.
The front-month time spread for the aviation fuel in Singapore , which has been in a contango structure since February, widened on Thursday to trade at a discount of 94 cents a barrel.
Singapore onshore middle distillate stocks declined 2.2% to a three-week low of 14.2 million barrels in the week ended Aug. 19, Enterprise Singapore data showed. The weekly Singapore middle distillate inventories have averaged at about 13 million barrels so far in 2020. This week’s stocks were 41.4% higher year over year.
The September crack for 500 ppm Gasoil is lower at $4.95 /bbl with the 10 ppm crack at $ 5.70 / bbl. The regrade is at -$ 5.10 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month crack for 0.5% VLSFO dipped for a second straight session on Thursday.
The front-month VLSFO crack was at $8.03 per barrel against Dubai crude during Asian trade, down from $8.47 per barrel a day earlier.
Cash discount for Asia’s 0.5% VLSFO was at $3.08 a tonne to Singapore quotes, compared with a $3-discount on Wednesday.
Meanwhile, Asia’s cash premium for 180-cst HSFO rose by 57 cents to $5.17 per tonne to Singapore quotes on Thursday, backed by a firmer deal in the Singapore physical trade window.
Onshore fuel oil stocks in Singapore rose 1.7 million barrels from the previous week to 25.5 million barrels in the week ended Aug. 19, data from Enterprise Singapore showed. Weekly fuel oil inventories averaged 24.3 million barrels so far this year, having averaged about 21 million barrels a week last year. Onshore fuel oil inventories were up 25.1%, compared with year-ago levels.
The September crack for 180 cst FO is higher at – $1.40 /bbl with the visco spread at $0.85 /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.