Crude Oil
Oil prices rose to their highest in more than a week on Monday as a response to the shutdown of Libyan oilfields. Brent crude futures rose 35 cents to settle at $65.20 a barrel. WTI crude futures rose 12 cents to settle at $58.66 a barrel.
During the day, touched $66 a barrel, its highest since Jan. 9 WTI made a high of $59.73, the highest since Jan. 10.
Foreign powers agreed at a summit in Berlin on Sunday to shore up a shaky truce in Libya, which has been in turmoil since the fall of Muammar Gaddafi in 2011. If Libyan exports are halted for any sustained period, storage tanks will fill within days and production will slow to 72,000 barrels per day (bpd), an NOC spokesman said. Libya has been producing around 1.2 million bpd recently.
Meanwhile in Iraq, another major oil producer, two police officers and two protesters were killed as anti-government unrest resumed after a lull of several weeks. Market activity was thin on Monday due to the Martin Luther King Jr. holiday in the United States.
Naphtha
Asia’s naphtha crack fell to a one-week low of $87.85 per tonne as higher oil prices weighed.
Nevertheless spot premiums stayed firm due to tighter supplies caused by refinery maintenance in the Middle East.
South Korea’s YNCC bought four cargoes of naphtha for first-half March delivery to Yeosu at premiums of about $22 a tonne to Japan quotes on a cost-and-freight (C&F) basis. That was higher compared with the $18.50 a tonne premium YNCC had paid on Jan. 7.
The February crack is steady at – $ 3.00 / bbl.
Gasoline
Asia’s gasoline crack was near a 1-1/2 week low of $4.38 a barrel as ample supplies persisted.
China’s January gasoline exports are seen below 1.5 million tonnes, lowest since August..
The February crack is lower at 5.75/ bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10 ppm gasoil were at 15 cents per barrel over Singapore quotes on Monday, down from 17 cents per barrel on Friday.
The February/March time spread traded at a premium of 35 cents per barrel on Monday, 13 cents higher than on Friday.
Cash premiums for jet fuel rose to 28 cents per barrel over Singapore quotes on Monday, compared with 19 cents per barrel on Friday.
In the United States, imports from markets including Europe have boosted supply, while milder weather has undercut distillate demand, which typically rises during winter. That is oversaturating the market, especially in the Northeast – the world’s biggest heating oil market – where inventories are already high. European diesel margins fell below their 10-year average for this time of the year to $11.39 a barrel on Friday.
The February crack for 500 ppm Gasoil has jumped to $ 12.25 /bbl with the 10 ppm crack at $ 12.75 / bbl. The regrade is at -$ 0.15 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month crack for 0.5% VLSFO snapped four straight sessions of declines on Monday, rebounding from a 1-1/2 month low in the previous session as concerns of tight supplies helped lift prices.
The front-month VLSFO crack rose to $24.85 per barrel above Brent crude, compared with $21.07 a barrel in the previous session its lowest since Dec. 6.
India’s MRPL has offered a 25,000 tonne cargo of marine fuel with a maximum 0.5% sulphur content loading from New Mangalore over Feb. 16-18 in a tender closing on Jan. 30 with next day validity.
S&P Global Platts announced a lower limit on the viscosity levels for VLSFO bunkers, also known as 0.5% marine fuel, for transactions in its assessment process.
The February 180 cst crack is higher at -$ 12.80 / bbl with the visco spread at $ 1.60 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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.
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.