Crude Oil
Oil prices settled slightly higher on Tuesday ahead of weekly U.S. inventory figures.
Brent crude rose 28 cents to settle at $41.72 a barrel. The WTI future for October, which expires Tuesday, settled up 29 cents to $39.60.
While Brent crude fell 15 cents to settle at $43.15 a barrel, while WTI crude rose 14 cents to settle at $41.11 per barrel.
Libya’s NOC said it expected oil production to rise to 260 KB/D next week, as the OPEC member looks to revive its oil industry, crippled by a blockade since January. Libya produced around 1.2 MB/D before the blockade.
Japan’s factory activity extended declines in Sep’20 largely due to a sharper fall in output, with the au Jibun Bank Flash Japan Manufacturing PMI largely unchanged at 47.3 as the world’s third-largest economy struggles to stage a robust recovery from the coronavirus pandemic.
api data
The API surprisingly reported a small build in crude stocks. However, the sharp draws in both gasoline and distillate stocks would be supportive for prices.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 974,760 (+5,721 DoD) yesterday. After several consecutive days of rise, the total number of active cases fell by around 38,000 to 7,406,220. (Click here for details).
Naphtha
Asia’s naphtha crack hit a seven-session low of $85.48 a tonne, dragged down by weakness in gasoline fundamentals.
The October crack is lower at $ 2.15 / bbl.
Gasoline
Asia’s gasoline crack extended losses on Tuesday and dropped to a four-session low of $4.13 a barrel.
The October crack is lower at $ 4.05 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for jet fuel were at $1.17 a barrel to Singapore quotes on Tuesday, 4 cents lower from Monday.
The regrade for October stood at a discount of $2.62 a barrel on Tuesday, prompting refiners to continue blending jet fuel into the diesel pool.
India’s diesel exports rose 35.4% to 2.79 million tonnes in August from 2.06 million tonnes in July. The August exports jumped about 18% year on year. The country exported about 140 KT of jet fuel in August, compared with 230 KT in July and 540 KT in August 2019.
The October crack for 500 ppm Gasoil is lower at $1.65 /bbl with the 10 ppm crack at $ 2.15 / bbl. The regrade is at -$ 3.10 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month HSFO viscosity spread climbed to a more than two-month high on Tuesday amid stronger demand, and tighter supplies, for cargoes of 180-cst HSFO relative to 380-cst HSFO cargoes.
The front-month viscosity spread climbed to $6 per tonne on Tuesday, up 50 cents from the previous session, and its highest since July 13.
Buying interest for 380-cst HSFO in particular has largely receded since a demand spike in July and August for power generation use in the Middle East during the summer, which lifted spot cash differentials to multi-month highs in the previous quarter.
The October crack for 180 cst FO is higher at – $3.00 /bbl with the visco spread at $0.85 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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.