Oil prices touched their highest since mid-November on Friday and posted weekly gains for the second week in a row, boosted by hopes that U.S.-China trade talks would soon produce a deal. Brent crude settled 5 cents higher at $67.12 a barrel. WTI futures settled 30 cents higher at $57.26 a barrel.
Brent gained 1.2 percent on the week. WTI recorded a 3-percent weekly rise and reached its strongest settlement price of 2019. Both markers registered their highest prices per barrel for the year at $ 67.73 and $ 57.81 respectively
Top U.S. and Chinese trade negotiators met on Friday to wrap up a week of talks that have seen the two sides struggle to reach a deal by a March 1 deadline. U.S. President Donald Trump has tweeted that he will push the March 1 deadline further.
However, U.S. energy firms cut four oil rigs operating this week to 853 after three weeks of adding rigs.
Meanwhile, crude inventories in West Texas fell to the lowest in four months after an additional pipeline started transporting crude from the largest U.S. shale field to the Gulf Coast, largely for exports.
Money managers cut their net long U.S. crude futures and options positions in the week to Feb. 5, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
No fresh news on the naphtha market.
The March crack is lower at -$ 7.20 /bbl
Asia’s gasoline crack extended gains to reach 64 cents a barrel premium to Brent crude, highest since Jan. 8 as firm demand from Indonesia provided support. I
Demand from India has been strong recently with refiners Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) seeking gasoline. India had imported 70,000 tonnes of gasoline in January, making this its highest monthly volume since May 2018 when it bought 120,000 tonnes. India’s gasoline exports for January on the other hand at 1.04 million tonnes was its lowest since August 2018 at 840,000 tonnes.
ARA Gasoline stocks dropped for the third week in a row by 115 KT to 1.14 million tons in the week to Feb. 21. Stocks are now only 7% above the 5 year average.
The March crack is higher at $ 0.80 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s cash discount for 10ppm gasoil was at 31 cents a barrel to Singapore quotes on Friday, compared with Thursday’s discount of 35 cents a barrel.
The front-month time spread, which was in contango since mid-November, moved into backwardation on Friday, to be at a premium of 8 cents a barrel, compared with a discount of 6 cents a day earlier.
Cash discounts for jet fuel narrowed to 31 cents a barrel to Singapore quotes on Friday, compared with a discount of 33 cents per barrel a day earlier.
ARA Gasoil stocks fell by 115 KT 2.42 million tones in the week to Feb. 21, the first draw in at least the past three weeks.
The March crack is higher at $ 14.65 /bbl with the 10 ppm crack at $15.60 /bbl. The regrade has dropped – $ 0.50 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asian fuel oil refining margins slipped on Friday, while cash premiums for mainstay 380-cst high-sulphur fuel oil dropped to their lowest in over 10 months, hurt by weaker buying interest in the Singapore physical market.
The more actively-traded 380-cst barge crack to Brent crude inched lower to minus $4.07 a barrel during Asian trading hours. It was at minus $3.99 per barrel on Thursday.
Cash differentials for 380-cst HSFO were at a premium of $1.48 a barrel to Singapore quotes, the lowest since April last year. The 380-cst March/April time spread was trading at about $2.25 a tonne on Friday, down from about $2.75 a tonne in the previous session.
Asia’s 180-cst fuel oil crack to Dubai crude for March fell to minus 38 cents a barrel, compared with minus 19 cents a day earlier.
Sales of shipping fuel oil in Europe’s largest port of Rotterdam dropped last year by more than 4 percent while demand for cleaner liquefied natural gas (LNG) bunkers rose more than sixfold.
Fuel oil stocks in ARA decreased by 104 KT to 983 KT in the week to Feb 21.
The March180 cst crack has collapsed to – $ 0.75 / bbl with the visco spread at $ 0.70 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
As fuel oil cracks ease, we have managed to close out a couple more positions.
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.