Crude Oil
Oil prices fell about 5 percent on Thursday, as worries about oversupply, outlook for energy demand and a U.S. interest rate rise knocked stock markets. Brent crude futures fell $2.89 to settle at $54.35 a barrel. WTI crude futures fell $2.29 to settle at $45.88 a barrel.
U.S. stock markets continued their decline on Thursday, dragging oil prices lower. Brent made a session low of $ 54.28, its lowest price since mid September 2017.
OPEC plans to release a table detailing voluntary output cut quotas for its members and allies such as Russia in an effort to shore up prices. Saudi Energy Minister Khalid al-Falih said he expected global oil stocks to fall by the end of the first quarter, but added that the market remained vulnerable to political and economic factors as well as speculation.
Naphtha
Asia’s naphtha crack edged up for a third day on Thursday to reach a four-session high of $53.13 a tonne on strong demand and the easing of a supply glut.
The stronger fundamentals were reflected in spot prices, for which discounts have been contracting since last week. Buyers were paying at levels between parity and a discount of $1 a tonne to Japan CFR prices. This is higher than the discount of around $4 a tonne Formosa had forked out on Dec. 13.
The January crack is higher at -$ 2.00 /bbl
Gasoline
No fresh news on gasoline markets today as well. Light distillate stocks in Sigapore plummeted by 1.4 million barrels to a 6 week low of 12.45 million million barrels. Stocks are now below last year’s levels which should be good news for gasoline.
The January crack is lower at $ 2.15 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10ppm sulphur content widened their discounts to 90 cents a barrel to Singapore quotes, a new record low. They were at a discount of 78 cents a barrel on Wednesday.
Middle distillate inventories in Singapore rose by 196 kb to 11.1 million barrels a month. This is their highest in more than 3-1/2 months.
Cash discounts for jet fuel narrowed to $1.18 a barrel to Singapore quotes on Thursday, compared with a discount of $1.20 a barrel on Wednesday.
The January crack is lower at $ 13.75 /bbl with the 10 ppm crack at $ 14.75 /bbl. The regrade is higher at $ 2.45 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s fuel oil market corrected higher on Thursday following sharp losses this week. This came despite the latest official data showing Singapore fuel oil inventories climb to a near seven-month high in the week ended Dec. 19.
Both 380-cst fuel oil front-month time spread and the 380-cst barge crack were sharply higher from their previous close.
The Jan/Feb 380-cst time-spread jumped to about $3.25 a tonne on Thursday from about $1.75 a tonne in the previous session. The front-month time-spread on Wednesday was at its lowest level since April. The January 380-cst barge crack against Brent crude climbed to as high as minus $7 a barrel on Thursday, from about minus $8.50 a barrel in the previous session. The front-month crack was later trading at about minus $7.25 a barrel.
Singapore Fuel Oil stocks jumped 1.219 million barrels to 20.81 million barrels in the week to Dec. 19. Singapore fuel oil stocks have risen steadily over the past month with four of the five past weeks reporting inventory builds. Fuel oil inventories were last higher in the week to May 30 at 21.052 million barrels. This week’s onshore fuel oil inventories were 8 percent lower than a year earlier.
The January 180 cst crack has jumped to -$ 1.10 / bbl with the visco spread at $ 0.55 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing Fresh to Report
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.
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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.