Crude Oil
Oil prices eased on Friday on renewed concern over the U.S.-China trade war. Brent futures fell 12 cents to settle at $64.28 a barrel. WTI crude futures, fell 4 cents to settle at $ 58.10/ bbl.
For the week, Brent rose 6.7%, its biggest gain since January, while WTI gained 5.9%, the most since June.
U.S. shale producers pounced on the chance to lock in future revenue for this year and next after oil prices surged by the most in 30 years early this week following the attack.
Money managers raised their net long U.S. crude futures and options positions by 11,209 contracts to 220,758 in the week to Sept. 17, the CFTC said.
A US-China trade deal appeared elusive on Friday after Chinese officials unexpectedly canceled a visit to farms in Montana and Nebraska as deputy trade negotiators wrapped up two days of negotiations in Washington.
Saudi Aramco has switched light crude with medium, heavy grades and delays oil supplies to buyers in Asia by 7-10 days, however most complex refineries in Asia are expected to be able to adapt quickly, the sources said.
In the United States, meanwhile, flooding from Tropical Storm Imelda forced a major refinery to cut production, while a key oil pipeline, terminals and a ship channel in Texas were shut. Exxon Mobil Corp shut some units at its 369 kbpd Beaumont refinery while Valero Energy Corp reduced production at its 335 kbpd Port Arthur refinery.
U.S. energy firms this week reduced the number of oil rigs operating for a fifth week in a row to the lowest since May 2017. Drillers cut 14 oil rigs in the week to Sept. 20, bringing the total count down to 719.
Naphtha
Asia’s naphtha crack was at a three-session high of $51.57 a tonne.
Saudi Aramco was seen on a buying spree, locking in at least 120 KT of European cargoes for September loading from Greece and Russia on top of 60 KT it had bought this week from India’s HPCL. It also had a contract with Egypt sealed before the attacks to load up to 77 KT of naphtha this month from Suez.
The attacks on Saturday has driven naphtha spot prices significantly higher this week. YNCC, for instance, had to shell out a premium of about $10 a tonne to Japan quotes on a C&F basis for five open-specification naphtha cargoes totalling around 125 KT for first-half November arrival at Yeosu. This was in sharp contrast versus a discount of $2 it had paid in early September.
The October crack is lower at – $ 5.05 / bbl.
Gasoline
Asia’s gasoline crack hit a fresh 13-month high of $10.01 a barrel on Friday. Gasoline stocks in ARA fell by 14 KT 1.06 million tonnes.
The October crack is higher at $ 7.90 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10ppm gasoil rose to 28 cents a barrel to Singapore quotes on Friday, compared with 14 cents per barrel a day earlier.
Cash differentials for jet fuel were at a premium of 6 cents a barrel to Singapore quotes on Friday, as against Thursday’s 3 cents a barrel.
ARA’s onshore inventories for gasoil rose by 1.4 million barrels to 12.47 million barrels in the week to Sept. 18, to their highest since Jan. 16, data from Enterprise Singapore showed on Thursday.
The October crack for 500 ppm Gasoil is higher at $ 17.45 /bbl with the 10 ppm crack at $ 18.15 / bbl. The regrade is at + $ 0.75 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s cash premium for 380-cst cargoes climbed on Friday to near record levels hit earlier this week amid firm buying interest in the Singapore trading window. The 380-cst front-month time spread also widened to near record levels.
Fuel oil supplies are tight as suppliers are not bringing in cargoes to the region as the market is in steep backwardation. The already tight supplies might shrink further in the coming days as exports from Saudi Arabia are expected to fall.
The cash premiums for 380-cst HSFO rose to $59.43 per tonne above Singapore quotes, up from $56.10 per tonne in the a previous session and near the record $61.63 per tonne hit on Tuesday.
The October/November time-spread for 380-cst HSFO widened to a premium of $81 a tonne, compared with $68 a tonne on Thursday and a record $82 a tonne on Tuesday.
Residual fuel oil inventories in ARA rose by 64 KT to 1.33 million tonnes which is a seasonal high in Europe.
The October 180 cst crack has once again dropped to -$ 1.05 / bbl with the visco spread at $ 0.90 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action for 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 refiner.
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.