Oil prices were up slightly on Thursday after the U.S. government reported a much smaller-than-anticipated rise in crude stocks. Brent futures rose 19 cents to settle at $59.31 a barrel. WTI crude futures settled 45 cents higher at $53.78 a barrel. The more-active second-month WTI benchmark was up 45 cents at $53.94 a barrel.
Gains were capped by worries about the spread of the Covid 19 outside China.
The death toll from the COVID-19 in mainland China rose to 2,247 (+8 DoD) yesterday, with the total number of confirmed infections at 76,378 (+811 DoD). It does appear that the number of deaths due to the virus outbreak is being contained in China. However, the daily cases growth factor has jumped up alarmingly to 1.89 yesterday from 0.92 previously (Click here for details).
Also supporting oil prices were U.S. sanctions this week on a trading unit of Russian oil giant Rosneft for its ties with Venezuela’s state-run PDVSA and conflict in Libya that has led to a blockade of its ports and oilfields.
DOE data showed crude inventories rose only 414 KB last week. The data also showed that U.S. East Coast refinery utilization rates fell last week to 59.2%, the lowest since November 2012. However, overall U.S. refinery utilization rates rose 1.4%, primarily as the refiners came out of maintenance.
Our material balance statement seems to suggest that the crude build is misstated.
On the products side, the draws appears to be overstated. The draw in distillate is particularly perplexing as all four components of change show builds.
Asia’s naphtha crack rose for the second day to reach a four-session high of $65.23 a tonne on Thursday.
The March crack has dropped to – $ 2.75 / bbl.
Asia’s gasoline crack fell to a two-session low of $6.68 a barrel with higher stockpiles seen. Singapore’s onshore light distillates stocks rose or 334,000 barrels, to a two-week high of 13.5 million barrels in the week to Wednesday, data from Enterprise Singapore showed.
The March crack is higher at $8.25 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Singapore’s middle distillate inventories rose marginally by 50 kb to 11.68 million barrels.
The IATA expects global passenger demand to fall by nearly 10% in 2020 due to the coronavirus outbreak, with the Asia-Pacific region hit the hardest, with a potential 13% loss in passenger demand, predicting a harsh year for airlines, which could put pressure on jet fuel prices.
The March crack for 500 ppm Gasoil dropped further to $9.60 /bbl with the 10 ppm crack at $ 10.50 / bbl. The regrade is at -$ 1.35 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s 0.5% VLSFO snapped six straight sessions of losses on Thursday, edging away from a more than three-month low hit in the previous session.
The front-month VLSFO crack rose to $14.55 per barrel above Brent crude during Asian trade, up from $14.30 a barrel in the previous session.
Singapore’s residual fuel oil inventories jumped 10% to their highest in more than nine months in the week ended Feb. 19, despite plummeting net import volumes.
Onshore fuel oil stocks jumped by 2.169 million barrels to 24.23 million barrels, data from Enterprise Singapore showed. Residual fuel stocks were 18% higher than the year-ago period.
The March 180 cst crack has risen to -$ 8.30/ bbl with the visco spread at $ 1.70 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh action for 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 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.