Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose on Friday, but they failed to scale the close of the previous Friday leaving oil lower for a weak.

Brent did a final trade of $96.09 on Friday after settling the official session at $96.72, up 13 cents, or 0.1%, on the day. Brent’s session high was $97.84, which if held, would have given the global crude benchmark a gain of 1.3% on the day. For the week, Brent was down 1.5%.

WTI did a final trade of $89.97 on Friday after officially settling the session at $90.88, up 27 cents, or 0.3% on the day. The session high for WTI was $92.08, which if maintained, would have given WTI a gain of 1.7% on the day. Instead, the modest bump at the close also left the U.S. benchmark down 1.3% on the week.

After Friday’s close, there were reports of a deal with Iran becoming imminent. “According to sources with knowledge of the matter, the proposal stipulates on the day after the agreement is signed, sanctions on 17 Iranian banks as well as 150 economic institutions will be lifted.” according to Al Jazeera.

The number of active oil rigs in the US fell by 7 to 598 according to data published by Baker-Hughes.

Refining margins for Asia’s naphtha markets have been suppressed as spot demand remains underpinned by bearish sentiment. Asia’s Naphtha crack dropped $4.58 to a discount of $30.98 a tonne on Friday. 

Naphtha margins have shed over 65% from the start of this month.

The September crack is lower at -$ 16.35 per barrel 

Refining margins for gasoline posted weekly gains following inventory draw downs in key trading hubs this week. Asia’s gasoline crack in the region fell 63 cents to $13.88 per barrel. However it has risen over 30% in the past week.

Gasoline stocks in ARA climbed by about 3% to 1.38 Million tonnes in the week to Thursday, data from Dutch consultancy, Insights Global, showed.

The September crack is higher at $13.60 per barrel.

Click Here for a graphical depiction of Global Gasoline stocks by region.

Asian refining margins for 10 ppm gasoil snapped a seven session gain streak on Friday, although margins gained 15% over the week as crude prices declined.

Cash differentials for gasoil with 10 ppm sulphur content were at a premium of $1.03 a barrel to Singapore quotes on Friday, compared with a premium of $0.96 per barrel a day earlier..

Refining margins or cracks for 10 ppm gasoil dipped to $46.14 compared to $46.14 per barrel a day earlier.

The market is expected to surge in the last quarter as North Western Europe weans itself off Russian oil and gas ahead of the December 5 and February 5 sanctions deadlines which would draw more diesel out of India, in turn tightening the FOB Singapore spot market.

The September crack for 500 ppm Gasoil is higher at $45.80 /bbl with the 10 ppm crack at $47.80 /bbl. The regrade is at -$5.75 /bbl.

Click Here for a graphical depiction of Global Distillate stocks by region.

Spot cash premiums in Asia’s fuel market hovered sideways on Friday amid a calm trading day.

The 180 cSt HSFO cash differential rose 97 to a premium of $5.97 per tonne over Singapore quotes as market backwardation widened slightly.

In contrast, the 380 cSt HSFO cash differential fell $4.04 per tonne to a premium of $7.64 per tonne as several competitive offers made up for the lack of any trade.

The September crack for 180 cst FO is lower at – $17.80 /bbl with the visco spread at $2.80 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

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.

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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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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