Crude Oil
Oil prices continued their recovery for a second day after major oil-producing nations said they would accelerate planned production cuts.
Brent futures settled 96 cents higher to settle at $21.33 /bbl. WTI rose $2.72 to settle at $16.50.
Kuwait said on Thursday it had begun cutting oil supply to the international market, ahead of the May 1 date when the deal was supposed to take effect.
Azerbaijan’s BP-led ACG project will have to cut output by 75-80 KB/D from May’20 for the first time ever as the country moves to meet its commitment under a global deal to cut production.
In just a week, Russia has to find ways to cut a fifth of its oil output under a deal to tackle the market glut and is looking at all options, including putting wells on repair and maintenance to abandoning them entirely and even burning oil, sources said.
The US President’s plan to fill the US SPR has become the centerpiece of his administration’s strategy to shield drillers from a meltdown in energy demand, but the industry says the program has been too slow and won’t be enough to save them.
OPEC’s share of India’s oil imports fell to 78.3% in 2019/20, its lowest in at least 19 years, data obtained from industry and trade sources show, as refiners in Asia’s third biggest economy increased imports of US and Mediterranean grades.
The rate of growth in Japan’s annual core consumer inflation slowed for the second straight month, rising +0.4% YoY, ahead of the BoJ rate review on Monday, which sources expect it will sharply cut its growth forecasts and take more easing steps.
EU leaders agreed on Thursday to build a trillion euro emergency fund to help recover from the coronavirus pandemic, avoiding another all-night bust-up but leaving divisive details until the summer.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 190528 (+6,601 DoD) yesterday, with the total number of confirmed infections at 2,716,806 (+85,201 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack rose for the seventh straight session on Thursday to hit a two-month high of $65.05 a tonne.
The intermonth spread, at a premium of $5, was at its highest in a month as strong demand boosted both values.
The May crack has improvded to -$0.20 / bbl.
Gasoline
Singapore’s onshore light distillates inventories eased 203 KB to reach a two-week low of 16.273 million barrels in the week to April 22, data from Enterprise Singapore showed. The current stockpiles were, however, 12.7% higher versus a year ago.
China’s gasoline exports in March at 1.82 million tonnes were up 8.2% from a year earlier as refineries scrambled to increase sales to overseas markets amid tepid domestic demand.
The May crack has dropped to -$5.70 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash differentials for jet fuel plunged on Thursday to their widest discounts since 2005, while prices for the aviation fuel lingered within close sight of their lowest level in over two decades.
Cash discounts for jet fuel widened to $4.52 a barrel to Singapore quotes on Thursday, the biggest cash discounts since November 2005. They were at a discount of $3.66 per barrel on Wednesday.
Cash differentials for 10 ppm gasoil were at a discount of $2.40 per barrel to Singapore quotes on Wednesday, compared with a discount of $2.72 a barrel in the previous session.
China’s diesel exports climbed to 2.83 million tonnes in March, up from 2.71 million tonnes in the same period last year, data from the General Administration of Customs showed on Thursday. The exports were 3.47 million tonnes combined for the first two months of the year. Jet kerosene exports in March plunged 15.3% from a year earlier to 1.48 million tonnes, customs data showed. The exports were 2.93 million tonnes combined for January and February.
Singapore onshore middle distillate stocks dropped 3.3% to 14.4 million barrels in the week ended April 22, Enterprise Singapore data showed. Weekly middle distillate inventories have averaged 11.9 million barrels so far in 2020, compared with 11.1 million barrels in 2019. Overall, onshore middle distillate inventories were 54.6% higher year-on-year.
The May crack for 500 ppm Gasoil has dropped to $2.70 /bbl with the 10 ppm crack at $ 4.90 / bbl. The regrade is at -$ 4.80 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Ex-wharf and delivered premiums for both 0.5% VLSFO and 380-cst HSFO have firmed this week.
Singapore’s residual fuel oil inventories dropped 9% to a 10-week low in the week ended April 22, official data showed on Thursday, despite a jump in net import volumes and weak spot demand for marine fuels. Onshore fuel oil stocks fell by 2.21 million barrels from the previous week to 22.33 million barrels, data from Enterprise Singapore showed. Residual fuel stocks were 8% lower than a year earlier, the widest weekly year-on-year deficit since March 2019.
The May crack for 180 cst FO has dropped to -$3.20 /bbl with the visco spread at $0.90 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
We shall sell the May FO crack at -$0.20 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.