Crude Oil
Oil prices settled lower on Wednesday after U.S. inventory figures showed demand weakening for refined products as global COVID-19 cases spiked.
Brent crude futures fell $1.43 to settle at $41.73 a barrel. WTI crude futures fell $1.67 to $40.03 per barrel.
On Tuesday, Russia’s energy minister said it was too early to discuss the future of global oil production curbs beyond December, less than a week after saying plans to scale back output restrictions should proceed.
The IMF slashed this year’s economic forecast for Asia, expecting Asian economies to contract 2.2% in 2020, reflecting a sharper-than-expected contraction in countries like India, a sign the coronavirus pandemic continues to take a heavy toll on the region.
Middle East producers’ share of India’s market fell to a four-month low of 61% while that of Africa rose to one year high of 21% in Sep’20. Low freight rates and a more competitive Brent benchmark compared with Middle East’s Dubai supported India’s African oil purchases.
European refinery output in Sep’20 rose 1.6% MoM but down 11.5% YoY. Euroilstock data showed on Wednesday. Production at refineries in Europe stood at 9.371 MB/D, with output of all products rising MoM.
doe data
Crude inventories fell by 1 million barrels in the week to Oct. 16 to 488.1 million barrels, while gasoline stocks rose in another weak showing for fuel demand. Overall product supplied, a proxy for demand, remained down 13% on the year and over the past four weeks when compared with the year-ago period.
The discrepancies of our material balance statement continued with crude stocks showing a far lower draw than computed while reported distillate stocks as far as 7 million barrels away from computed stocks.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,135,703 (+6,855 DoD) yesterday. The total number of active cases rose by around 150,000 DoD to 9.42 million. (Click here for details).
Naphtha
Asia’s naphtha crack rebounded from a seven-week low to reach a three-session high of $75.30 a tonne on Wednesday, with demand seen from Japan.
The November crack is steady at $ 1.90 /bbl
Gasoline
Japan’s gasoline stockpiles fell 120,000 barrels in the week to Oct. 17 to 11.75 million barrels but this was 1.56 million barrels higher versus a year ago. Refinery utilization run rates were however 13.4% lower versus a year ago.
The November crack is lower at $ 2.90 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s benchmark 10ppm diesel crack edged up 2 cents and jet fuel refining margins rose 20 cents to a two-session high of $3 a barrel and 93 cents a barrel, respectively, as stocks drawdown in pockets of the world gave some support.
Middle distillates stocks held in Fujairah dived 11.3% to a two-week low of 3.9 million barrels in the week to Monday, data from Fujairah Oil Industry Zone showed.
Japan’s kerosene stocks fell 110,000 barrels in the week to Oct. 17 to 18.59 million barrels but the current stockpiles were 1.27 million barrels higher versus a year earlier.
The November crack for 500 ppm Gasoil is higher at $2.25 /bbl with the 10 ppm crack at $ 3.05 / bbl. The regrade is at -$ 1.20 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash premiums for cargoes of Asia’s HSFO held firm on Wednesday, supported by strong buying interest in the Singapore trading window. But an absence of suppliers of HSFO cargoes meant that no deals were reported. 380-cst HSFO cash premiums were at a more than three-month high of $3.52 per tonne to Singapore quotes while 180-cst HSFO premiums slipped to $6.67 a tonne, down from one-year high earlier this week.
Meanwhile, fuel oil inventories in the Fujairah bunkering and storage hub jumped 15% in the week to Oct. 19. Fujairah Oil Industry Zone inventories for heavy distillates and residues rose by 1.396 million barrels from the previous week to 10.361 million barrels, data via S&P Global Platts showed. Fujairah’s fuel oil inventories were 17% lower than year-ago levels.
The November crack for 180 cst FO is higher at $0.10 /bbl with the visco spread at $1.25 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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.
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.