Crude Oil
Oil prices lost about 1% on Friday as the economic recovery worldwide runs into stumbling blocks due to renewed coronavirus lockdowns.
Brent crude fell 55 cents to settle at $44.35 a barrel, while WTI fell 86 cents to $42.34 per barrel.
Brent fell about 1% for the week, while WTI saw a weekly rise of nearly 1%.
The euro zone’s economic recovery from its deepest downturn on record stalled this month as pent-up demand unleashed by the easing of lockdowns in July dwindled, a survey showed. By contrast, U.S. housing and manufacturing survey data came in better than expected.
India’s oil imports plunged to their lowest in over 9 years in Jul’20, falling to around 3 MB/D, with Middle Eastern oil accounting for 71.5% of India’s oil imports, its highest share in 26 months, while African imports fell to 5%, the lowest in at least 14 years.
Libya’s national oil company said it could restart oil exports after the North African country’s internationally recognized government in Tripoli announced a ceasefire, putting further pressure on oil prices.
US energy firms added 11 oil rigs in the week to 21 Aug’20, the most in 7 months to total 183 (-571 YoY), according to Baker Hughes, as shale producers start drilling again now that crude prices have recovered from historic lows.
Energy firms shut 57.6%, or 1.07 MB/D of offshore crude oil production in the US Gulf of Mexico because of the twin threat from Hurricane Marco and Tropical Storm Laura, the US government said on Sunday.
Money managers cut their net long US crude futures and options positions by 6,669 contracts to 349,178 in the week to 18 Aug’20, the US CFTC said on Friday.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 812,194 (+4,248 DoD) yesterday. The total number of active cases rose by 27,000 odd to 6,690,129. (Click here for details).
Naphtha
Asia’s naphtha crack hit a 3-1/2-week high of $67.45 a tonne, boosted by demand in the form of spot and longer-term contracts.
The September crack is higher at $1.20 /bbl.
Gasoline
Asia’s gasoline crack surged 35% on Friday to touch a near two-month high of $3.46 a barrel as inventories fell across key countries.
Gasoline stocks in ARA fell 4.6% from a record high to hit 1.39 million tonnes in the week ended Thursday.
The September crack is lower at $3.80 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for jet fuel were at 50 cents a barrel to Singapore quotes on Friday, compared with a 55-cent discount on Thursday.
India’s diesel exports dipped 1.4% to 2.06 million tonnes in July, down from 2.09 million tonnes in June. The July exports dropped 21.1% year on year. The country exported about 230 KT of jet fuel in July, compared with 250 KT in June and 480 KT in July 2019.
Jet fuel stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped 4% to 991 KT in the week to Aug. 20, down from a record high in the previous week. ARA gasoil inventories rose 3% to 2.6 million tonnes.
The September crack for 500 ppm Gasoil is lower at $4.15 /bbl with the 10 ppm crack at $ 4.95 / bbl. The regrade is at -$ 4.90 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO crack slipped on Friday to its lowest in over two weeks, while cash discounts for the marine fuel widened on low buying interests for physical cargoes. The front-month VLSFO crack was at $7.27 per barrel against Dubai crude during Asian trading hours, a level not seen since Aug. 4. It was at $8.03 per barrel on Thursday. VLSFO cracks have shed 13.3% this week.
Cash discount for Asia’s 0.5% VLSFO was at $3.21 a tonne to Singapore quotes on Friday, compared with a discount of $3.08 per tonne a day earlier.
The September/October time spread remained unchanged in its contango structure to trade at a discount of $2.75 per tonne on Friday.
The 380-cst HSFO barge crack for September was at a discount of $5.92 a barrel to Brent on Friday, compared with minus $5.85 a barrel on Thursday.
India’s refined product imports surged 46.4% to 4.07 million tonnes year over year, mainly due to a sharp jump in the country’s fuel oil imports, government data showed. India imported a record 1.22 million tonnes of fuel oil in July, compared with 590 KT in June and 127 KT in July 2019.
Fuel oil stocks held in ARA rose 10.4% to 1.3 million tonnes in the week to Aug. 20.
The September crack for 180 cst FO is unchanged at – $1.40 /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 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.