Crude Oil
Oil settled up at a nine-month high on Friday, rounding out seven straight weeks of gains.
Brent crude futures for February settled 76 cents higher at $52.26 a barrel, while WTI futures settled up 74 cents at $49.10 a barrel.
Exports and transit of Russian oil in the Q1’21 were planned at 62.1 MMT vs 62.4 MMT in Q4’20, a quarterly export schedule seen by Reuters showed on Friday. On a daily basis oil exports will rise by 1.7% QoQ.
Norway’s Crude oil output increased 2.4% YoY to 1.73 MB/D, in line with a production cap set by the Norwegian government for 2H’20, while its natural gas ouput fell 4.7% YoY to 318.9 MCM in Nov’20, according to the NPD.
The global tourism industry is likely to record its worst year of travel in 2020, said the UNWTO 17 Dec’20, as Jan-Oct’20 arrivals plunge by 72% YoY, with global tourism numbers back to levels not seen since 1990.
US energy firms added 5 oil rigs in the week to 18 Dec’20 to total 263 (-422 YoY), as producers continued to return to the wellpad with crude prices trading above $45/bbl since late Nov’20.
Money managers raised their net long U.S. crude futures and options positions by 2,046 contracts to total 321,332 in the week to 15 Dec’20, the US CFTC said on Friday.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,691,206 (+7,941 DoD) yesterday. The total number of active cases rose by around 630,000 over the weekend to 21.38 million. (Click here for details).
Naphtha
Asia’s naphtha and gasoline cracks strengthened on Friday to their highest since October, underpinned by tight supplies as refineries globally kept output low. Prompt-month backwardation for naphtha widened by 50 cents on robust demand from petrochemical producers while arbitrage supplies from the west are expected to fall in January.
About 1.2 million to 1.4 million tonnes of western naphtha supplies are expected to arrive in Asia in January. This would be down from about 1.8 million tonnes this month.
Several petrochemical makers including Mitsui Chemical and LG Chem issued tenders on Friday to buy naphtha for late January and February.
The January crack is lower at $0.90 /bbl.
Gasoline
No fresh news on the Asian gasoline markets.
The January crack is lower at $3.05 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian refining margins for 10 ppm gasoil rose on Friday, posting their eighth consecutive weekly gain, as a rebound in manufacturing activity in the region has bolstered industrial demand for the fuel. Refining margins for 10 ppm gasoil rose 9 cents to $6.51 a barrel over Dubai crude during Asian trading hours, their highest level since July 30.
Revived transportation and industrial activity in China and India since September has helped boost the gasoil market sentiment.
The gasoil EFS) traded at minus $7.69 per tonne on Friday, which typically makes it unworkable for arbitrage shipments.
The January crack for 500 ppm Gasoil is lower at $5.50 /bbl with the 10 ppm crack at $ 6.25 / bbl. The regrade is at -$ 0.55 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s cash premium for 380-cst high-sulphur fuel oil HSFO was at $1.92 per tonne to Singapore quotes, down from $2.01 on Thursday. The premium, however, has jumped 156% this week, the biggest weekly rise since Oct. 16.
The 380-cst HSFO barge crack for January was at a discount of $5.96 a barrel to Brent on Friday, compared with minus $5.90 a barrel on Thursday.
The front-month VLSFO crack edged higher by 3 cents to $10.48 per barrel against Dubai crude during Asian trading hours. The VLSFO cracks have gained 7.6% this week.
Cash differential for Asia’s 0.5% VLSFO was at a discount of $1.44 a tonne to Singapore quotes on Friday, as against $1.06 per tonne a day earlier.
The January crack for 180 cst FO is lower at -$1.40 /bbl with the visco spread at $0.70 /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.