Crude oil prices rose sharply on Monday, caught up in a general rally in commodities driven by expectations of higher inflation.
Brent futures settled up $2.33, or 3.7%, at $65.24. WTI crude futures settled up $2.34, or 4.0%, at $61.40 a barrel.
The ongoing supply constraints from the closure of Texan wells and pipelines due to last week’s cold snaps also supported prices as their return to full production could take longer than earlier envisaged.
In addition, the expansionist US monetary policy is also stoking fears of inflation, which is making the US Dollar weaker.
Still, the supply picture is far from certain. Saudi Arabia and Russia are heading toward an OPEC+ meeting next week with differing opinions on whether to add more supply to the market in April. The kingdom wants to hold output steady, according to delegates, but Moscow is indicating that it still wants to proceed with an increase.
The share of Canada and the US in India’s Jan’21 oil imports surged to a record 11% while that of the Middle East and South America declined, data obtained from sources showed. India imported 4.8 MB/D of oil in Jan’21.
Reliance Industries announced the contours of its demerger of its O2C (oil-to-chemicals) business into a wholly-owned subsidiary, in order to attract global investors like Saudi Aramco and sought shareholder and creditor approval. Click here for details.
S&P Global Platts has decided to include US crude grade WTI Midland in its dated Brent oil price assessment, the first crude from outside the North Sea to be added to the global benchmark, the company said on Monday.
Hedge funds added to their bullish positions in petroleum last week, purchasing the equivalent of 17 MB in the week to 16 Feb’21, but for the second week running, purchases were restricted to US crude, with no buying elsewhere in the complex.
At a global level, the death toll from the COVID-19 virus rose to 2,484,826 (+6,522 DoD) yesterday. The total number of active cases fell by around 170,000 DoD to 21.99 million. (Click here for details)
Asia’s gasoline and naphtha cracks slipped on Monday amid rising crude oil prices, though sentiment was still supported by signs of improving demand and a narrowing supply overhang in the near term as refiners in north Asia head into the spring turnaround season.
Asia’s naphtha crack slipped marginally to $108.43 per tonne on Monday, down from a near two-week high on Friday.
The March crack is lower at $2.30 /bbl
Asia’s gasoline crack eased to $4.94 per barrel on Monday, down from a near five-month high of $5.30 a barrel on Friday.
The March crack is lower at $7.15 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s cash premiums for 10 ppm gasoil inched lower on Monday, due to sluggish buying interests for physical cargoes, while refining margins for the industrial fuel dropped on firmer feedstock crude prices.
Cash differentials for gasoil with 10 ppm sulphur content were at a premium of 2 cents a barrel to Singapore quotes, compared with a 3 cent premium on Friday.
China’s diesel exports this month are expected to exceed January’s 1.56 million tonnes as sluggish domestic demand during the Lunar New Year break this year has resulted in high stockpiles, according to Refinitiv oil research assessments.
But diesel exports from India dropped about 12% in January from the preceding month, government data showed on Friday. With manufacturing activities and transportation demand picking up, India’s diesel exports would likely remain limited in the short-term, market watchers said.
Cash discounts for Jet remain unchanged at 25 cents below Singapore quotes.
The March crack for 500 ppm Gasoil is unchanged at $7.15 /bbl with the 10 ppm crack at $ 8.35 / bbl. The regrade is at -$ 1.70 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s HiLo or sulphur spread, climbed further to $124.50 a tonne on Friday, up from $123.25 in the previous session and its highest since March 11, according to Refinitiv data in Eikon.
VLSFO cash differentials slipped by 3 cents/ MT to $2.55 /MT.
180 cSt HSFO cash differentials plumetted by $1.34 / MT to a discount of $0.16/ MT.
The 380 cSt HSFO differentials also sank 44 cents to a discount of $0.21 /MT.
The March crack for 180 cst FO is lower at -$3.70 /bbl with the visco spread at $0.70 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
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.