Crude Oil
Oil prices hit 13-months highs again Wednesday after the U.S. government reported that crude production across the country fell by more than a million barrels per day last week after the mega snowstorm that blanketed Texas, the energy heartland of the country.
Brent futures finished the session up $1.70, or 2.6%, at $66.18 per barrel. Brent hit a session high of $66.35 earlier, chasing Tuesday’s 13-month high of $66.79.
WTI crude settled up $1.55, or 2.5%, at $63.22 per barrel, after rallying to a January 2020 high of $63.37.
OPEC+ oil producers will discuss a modest easing of oil supply curbs from Apr’21 given a recovery in prices, OPEC+ sources said, although some suggest holding steady for now given the risk of new setbacks in the battle against the pandemic.
The volume of crude and condensate in floating storage, on tankers idled offshore for at least 7 days, totaled 80.2 MMB in the week of 22 Feb’21, the lowest since Feb’20. The volume peaked at more than 210 MMB in Jun’20, according to Kpler.
DOE data
The DOE data was more or less in synch with the API data, a rare occurrence in itself. Having said that the crude build appears to have been massively under-reported as per our material balance report.
While the reported distillate draw too seems to be a lot more than can be calculated, the gasoline build appears to be a slight overstatement of stocks.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,507,731 (+10,814 DoD) yesterday. The total number of active cases fell by around 400,000 DoD to 21.88 million. (Click here for details)
Naphtha
Asia’s naphtha crack rose to a two-week high of $108.88 per tonne, up 70 cents a tonne from the previous session.
Prices were lifted by expectations of limited arbitrage flows from the West and firm demand.
The March crack is lower at $1.80 /bbl
Gasoline
Asia’s gasoline crack climbed on Wednesday, following four straight sessions of declines, amid signs of improved regional demand and upcoming Asian refinery spring maintenance, trade sources said.
The crack rose to $4.43 per barrel on Wednesday, up by 25 cents a barrel from the previous session.
Light distillates stocks held in Fujairah jumped 12%, or 894,000 barrels, to an eight-month high of 8.095 million barrels in the week ended Feb. 22, data via S&P Global Platts showed.
The March crack is higher at $7.10 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10 ppm sulphur content were at a discount of 1 cent a barrel to Singapore quotes, compared with a 1 cent premium on Wednesday.
Asia’s cash differentials for jet fuel dropped to their lowest level in three months on Wednesday, weighed down by persistent weakness in aviation demand.
Cash differentials for jet fuel were at a discount of 38 cents per barrel to Singapore quotes on Wednesday, a level not seen since Nov. 23. They were at a discount of 25 cents per barrel on Tuesday.
Middle-distillate inventories in the Fujairah Oil Industry Zone slipped 2.4% to 4.1 million barrels in the week ended Feb. 22, data via S&P Global Platts showed.
The March crack for 500 ppm Gasoil is lower at $6.55 /bbl with the 10 ppm crack at $ 7.75 / bbl. The regrade is at -$ 1.30 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack slipped on Wednesday, edging away from a one-year high touched in the previous session, as crude prices firmed.
The front-month VLSFO crack slipped to $15.70 a barrel above Dubai crude oil prices, down 20 cents, according to Refinitiv data in Eikon.
Similarly, the front-month sulphur spread, the price differentials between VLSFO and 380-cst high-sulphur fuel oil (HSFO), slipped to $128 a tonne, down 50 cents from an 11-month high hit on Tuesday, Refinitiv data showed.
Fuel oil inventories in the Fujairah bunkering and storage hub jumped 16% to a five-week high in the week ended Feb. 22, official data showed. Stockpiles jumped by 1.531 million barrels, or about 241,000 tonnes, to 11.018 million barrels, or 1.735 million tonnes, data via S&P Global Platts showed.
VLSFO cash differentials fell by 20 cents/ MT to $2.80 /MT.
180 cSt HSFO cash differentials rose by $0.16 / MT to a premium of $0.11/ MT.
The 380 cSt HSFO differentials rose by 1 cent to a discount of $0.20 /MT.
The March crack for 180 cst FO is lower at -$3.55 /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.