Global oil markets closed up for a fourth straight week on Friday in a pre-summer rally based sometimes more on demand hype and inflation talk than consumption, with U.S. fuel usage remaining tepid while U.K.-based Covid infections hit four-month highs.
Brent crude did a pre-weekend trade of $73.19, after settling Friday’s session at $73.51 per barrel, up 45 cents or 0.6%. For the week, Brent gained 1.1%, after matching an April 2019 high of $74.96 on Wednesday.
WTI futures did a pre-weekend trade at $71.40 per barrel after settling Friday’s session at $71.64, up 60 cents or 0.8%. For the week, WTI gained 1%, after matching an October 2018 high of $72.99 on Wednesday.
Norway’s crude output dropped to 1.65 MMB/D in May’21 (-6% YoY, -4% MoM), the NPD said 18 Jun’21, as the effects of the pandemic offset rising expectations of the giant Johan Sverdrup field.
OPEC officials heard from industry experts that US oil output growth will likely remain limited in 2021, giving it more power to manage the market in the short term before a potentially strong rise in shale output in 2022.
Western officials warned Tehran on Sunday that negotiations to revive its nuclear deal could not continue indefinitely, after the sides announced a break following the election of a new hardline president in Iran.
US energy firms added 6 rigs to total 365 (+166 YoY), the highest since Apr’20, according to Baker Hughes, as growth in drilling slows despite crude prices hitting their highest since 2018.
Money managers raised their net long US crude futures and options positions by 27,949 contracts to total 424,476 in the week to 8 Jun’21, the US CFTC said on Friday.
api data
While the API data showed a huge stock draw for crude inventories, it also showed significant builds in product stocks. This build does not augur well for estimated product demand which, up to now, has been far less than expected. Official data is awaited tomorrow.
At a global level, the death toll from the COVID-19 virus rose to 3.88 Million (+6,263 DoD) yesterday. The total number of active cases rose fell by around 100,000 DoD to 11.56 million. (Click here for details).
Asia’s naphtha crack recovered on Friday after Brent crude futures dipped overnight, but plentiful supplies remained a drag on the light distillates complex.
The naphtha crack jumped to $90.03 a tonne from $86.90 a tonne in the previous session.
Prompt naphtha spread between first-half August and first-half September narrowed for a second session by 50 cents in backwardation as western supplies are expected to jump in July while margins for ethylene are down sharply from a few weeks ago.
The July crack is higher at -$0.15 / bbl
Asia’s gasoline crack also recovered on Friday after Brent crude futures dipped overnight, but plentiful supplies remained a drag on the light distillates complex.
Asia’s gasoline crack was at $5.12 a barrel, up 45 cents from the previous session.
China’s gasoline exports were at 1.55 million tonnes in May, edging up 5% from April and more than double the low base in May 2020 when the COVID-19 pandemic curbed travel demand overseas.
The July crack is higher at 8.25 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash discounts for cargoes of Asia’s 10 ppm gasoil slipped on Friday on weaker physical deal values in the Singapore trading window, but ended the week higher on signs of improving demand in Asia.
Cash discounts for gasoil with 10 ppm sulphur content widened by 2 cents to 4 cents per barrel to Singapore quotes on Friday.
Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped 7.4% to 2.1 million tonnes in the week ended June 10, data from Dutch consultancy Insights Global showed.
China’s diesel exports plunged 38% MoM to 1.68 MMT in May’21, their lowest level this year, as reduced fuel output during the refinery maintenance season forced refiners to prioritise domestic consumers, data from the GAC showed.
Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped 7.4% to 2.1 million tonnes in the week ended June 10, data from Dutch consultancy Insights Global showed.
Cash discounts for jet fuel narrowed by 2 cents to 31 cents per barrel to Singapore quotes on Friday.
The July crack for 500 ppm Gasoil is unchanged at $6.55 /bbl with the 10 ppm crack at $ 8.55 /bbl. The regrade is at -$ 0.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Cash differentials for cargoes of Asia’s 0.5% very low-sulphur fuel oil (VLSFO) dropped on Friday, forfeiting weekly gains, as concerns over ample supplies and sluggish demand weighed on sentiment.
VLSFO cash discounts were near parity, a one-and-a-half-month high, on Thursday but dropped to a discount of 68 cents a tonne on Friday.
Fuel oil stocks in the ARA refining and storage jumped by 13%, or 175,000 tonnes, to 1.49 million tonnes in the week ended June 17, data from Dutch consultancy Insights Global (IG) showed.
The June crack for 180 cst FO is lower at -$5.55 /bbl with the visco spread at $1.30 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh action today.
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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.