Crude Oil
Crude oil prices rose marginally on Wednesday, shrugging off dismal demand forecasts from the US.
Brent futures settled 18 cents higher at $56.08 a barrel. The March WTI future settled at $53.24 per barrel, up 26 cents.
Oil prices have responded positively to yesterday’s statements by US Treasury Secretary-designate Yellen and to the ensuing USD weakness, gaining by around 2%. Its overall figure for 2021 oil demand is now 96.64 million b/d, down from 96.91 million b/d in last month’s report, the largest in a succession of downward revisions, which have totaled 780,000 b/d since last June.
Shell has lifted the force majeure imposed on exports of Nigeria’s Forcados crude oil which went into effect on Sunday morning, it said in a statement on Wednesday. Forcados exports typically reach about 250 KB/D.
Saudi Arabia’s crude oil exports rose for a fifth consecutive month to a seven-month peak of 6.35 MB/D in Nov’20, while its domestic crude refinery throughput fell by 2.6% YoY to 2.34 MB/D, and its crude output was little changed at 8.97 MB/D.
Saudi Arabia remained China’s top crude supplier in 2020, with total shipments rising 2.9% YoY to 84.92 MMT (~1.69 MB/D), with Russia a close second at 83.57 MMT (~1.67 MB/D), up 7.9% YoY, government data showed.
api data
The API data was decidedly bearish with builds across the board. We will wait for the official results tomorrow.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,081,660 (+17,299 DoD) yesterday. The total number of active cases rose by around 90,000 DoD to 25.37 million. (Click here for details).
Naphtha
Naphtha’s refining margin fell on Wednesday, widening a gap from a 13-month high of $116.03 a tonne on Monday to $102.98 a tonne, a near two-week low.
The February crack is lower at $1.50 /bbl.
Gasoline
Asia’s benchmark gasoline crack extended losses on Wednesday, slipping to a near three-week low on renewed demand worries as many countries have imposed a fresh round of lockdowns to curb the spread of COVID-19. The 92 RON gasoline crack slipped to $3.41 a barrel above Brent crude, down from a three-month high last week and its lowest since Dec. 30.
The February crack is marginally higher at $4.50 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash differentials for jet fuel dropped on Wednesday, as buying interests in the physical market remained muted and aviation demand continued to face headwinds from travel restrictions in the region.
Cash differentials for jet fuel were at a discount of 18 cents per barrel to Singapore quotes, compared with a 16-cent discount a day earlier.
Global scheduled flight seats were 50% lower in the week to Monday year-on-year, a deterioration from 48% lower in the preceding week, according to aviation data firm OAG
Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 11.8% to 3.9 million barrels in the week ended Jan. 18, data via S&P Global Platts showed.
The February crack for 500 ppm Gasoil is lower at $4.85 /bbl with the 10 ppm crack at $ 5.70 / bbl. The regrade is at -$ 0.85 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO crack against Dubai crude edged lower on Wednesday, widening a gap from a more than 10-month high at the start of the week, driven lower by firming crude oil prices.
Fujairah Oil Industry Zone inventories for heavy distillates and residues rose by 1.019 million barrels, to 11.399 million barrels data via S&P Global Platts showed. These were, however, 3% lower than last year’s levels
The January crack for 180 cst FO is marginally lower at -$3.30 /bbl with the visco spread at $0.55 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action 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.