Crude Oil
Oil prices rose more than 2% on Wednesday, boosted by draws in U.S. inventories of crude, gasoline and distillates.
Brent crude futures for February settled $1.12 higher at $51.20 a barrel, while WTI futures rose $1.10 to $ 48.35 per barrel.
The number of Americans filing first-time claims for unemployment benefits unexpectedly fell last week improving investor sentiment. A falling U.S. dollar also supported prices.
Malaysia’s Petronas has declared force majeure on its Miri and Cendor crude oil grades following production issues, with plans to resume Cendor output in Jan’21, while it was not clear when Miri’s output could return to normal.
US energy firms added 1 oil rig in the week to 23 Dec’20 to total 264 (-413 YoY), as higher energy prices prompt producers to keep returning to the wellpad in recent months.
doe data
U.S. crude inventories fell by 562,000 barrels in the week to Dec. 18 to 499.5 million barrels, the EIA said on Wednesday. Gasoline stocks fell by a surprise 1.1 million barrels in the week to 237.8 million barrels, the EIA said, while distillate stockpiles fell by 2.3 million barrels in the week to 148.9 million barrels. As the EIA site is not updated as of now, we are unable to present our usual comments on the data.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 1,723,236 (+13,208 DoD) yesterday. The total number of active cases rose by around 90,000 over the weekend to 21.51 million. (Click here for details).
This site too, has not been updated .overnight.
Naphtha
Asia’s naphtha crack edged up on Wednesday while the prompt inter-month spread eased slightly as the market took a breather from the recent rally.
The restart of three South Korean crackers and robust petrochemical margins have spurred Asia’s naphtha demand, pushing spot premiums to multi-month high.
The market’s strength has drawn Indian refiners to sell more naphtha cargoes as they ramp up utilization rates into next year, the country’s exports of the petrochemical feedstock in November were still about a third lower than the same month a year ago.
Japan’s naphtha imports for the petrochemical sector rose 22% in November from the same month a year earlier.
The January crack is unchanged at $0.60 /bbl.
Gasoline
Gasoline prices and its crack were little changed as concerns about demand weighed amid widening lockdowns in countries affected by COVID-19.
China’s gasoline exports in Nov’20 retreated from record highs, falling 31.6% YoY to 1.26 MMT, data showed on Wednesday.
Light distillates stocks at the Fujairah Oil Industry Zone fell for the week ended Dec. 21 but stayed above 7 million barrels.
European refineries’ gasoline output was up 3.1% in November from the previous month and down 4.4% on the year at 2.3 million barrels per day.
The January crack is lower at $3.30 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for gasoil with 10 ppm sulphur content narrowed by 2 cents to 3 cents a barrel to Singapore quotes, a level not seen since Aug. 7, the last time when the differentials were in the positive territory.
The Jan/Feb time spread for 10 ppm gasoil in Singapore traded at a discount of 3 cents per barrel on Wednesday, compared with minus 8 cents per barrel a day earlier.
Middle-distillate inventories in Fujairah dropped 9.5% to 5.5 million barrels in the week ended Dec. 21, data via S&P Global Platts showed.
India’s diesel exports fell 5.5% to 2.24 million tonnes in November from 2.37 million tonnes in October. The November exports were about 31.5% lower year on year.
The country exported about 270,000 tonnes of jet fuel in November, compared with 180,000 tonnes in October and 710,000 tonnes in November 2019.
The January crack for 500 ppm Gasoil is higher at $5.60 /bbl with the 10 ppm crack at $ 6.40 / bbl. The regrade is at -$ 0.85 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO cash discount shrank to its narrowest in over a week.
By contrast, 180-cst and 380-cst HSFO cash differentials edged lower, extending losses due to ample prompt supply and limited demand.
Fuel oil inventories in Fujairah slipped 2% in the week to Dec. 21 from a seven-week high in the previous week. Fujairah inventories for heavy distillates and residues fell by 212,000 barrels to a two-week low of 11.115 million barrels data via S&P Global Platts showed. Fujairah’s fuel oil inventories were 1% lower than year-ago levels. Fuel oil exports from the UAE rose to a five-week high of 293,000 tonnes in the week to Dec. 20, up by 37,000 tonnes from the week before..
The January crack for 180 cst FO is lower at -$2.40 /bbl with the visco spread at $0.70 /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.