Crude Oil
Oil fell about 2 percent on Friday as grim manufacturing data from Germany and the U.S. reignited fears of a slowdown in the global economy and oil demand.. Brent crude settled 83 cents lower at $67.03 a barrel. WTI crude futures fell 94 cents to settle at $59.04 a barrel.
For the week, Brent dropped around 0.2%, but WTI gained 0.9%.
Wall Street’s main indexes tumbled between 1 and 2 percent on Friday after the IHS Markit Purchasing Managers Index plunged to 44.7 in March, its lowest level since 2012 and way below market expectations of 48,
Further demoralizing investors is the fact that no breakthrough has emerged in the trade stand-off between Washington and Beijing, at least before meetings scheduled on March 28-29. Trade negotiations with China were progressing and a final agreement “will probably happen,” U.S. President Donald Trump said in a television interview aired on Friday.
U.S. energy firms this week reduced the number of oil rigs operating for a fifth week in a row, cutting nine rigs to a count of 824, the lowest count in nearly a year as independent producers follow through on plans to cut spending with the government cutting its growth forecasts for shale output.
Naphtha
No fresh news on Naphtha. ARA naphtha inventories slipped to 256 KT in the week to March 21, down from 283 KT the week before
The April crack is higher at -$ 4.85 /bbl
Gasoline
Asia’s gasoline crack rose to $7.68 a barrel, its highest since Oct. 2, from $7.15 a barrel in the previous session and $1.80 a barrel at the start of the month.
Gasoline stocks in ARA were virtually unchanged at 1.07 million tonnes in the week to March 21, data from Dutch consultancy Insights Global showed.
The April crack is higher at $ 7.20 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10ppm gasoil widened to 20 cents a barrel to Singapore quotes, compared with a discount of 17 cents per barrel a day earlier.
Gasoil stocks have come down but there are still supplies available in the region as the East-West arbitrage window is not quite open at the moment.
The gasoil EFS has averaged around minus $10 per tonne this week, way below workable levels of -$ 15-18 per tonne.
Cash discounts for jet fuel were at 37 cents a barrel to Singapore quotes on Friday, as against a 36-cents discount on Thursday.
ARA gasoil inventories rose by 108 KT in the week to March 21 to 2.54 million tonnes, a 5 week high.
The April crack for 500 ppm Gasoil is steady at $ 12.70 /bbl with the 10 ppm crack at 13.65 / bbl. The regrade is higher at +$ 0.35 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash differentials for Asia’s 380-cst high sulphur fuel oil (HSFO) flipped to a discount for the first time in almost a year on Friday.
380-cst cash differentials sank to minus 44 cents a tonne to Singapore quotes, compared with plus 31 cents per tonne in the previous session and plus $2.95 per tonne at the start of the month. Singapore cargoes of 380-cst HSFO last traded at a discount on April 5, 2018.
Market sentiment has soured in the past couple of weeks on expectations of ample arbitrage supplies and sluggish demand for bunker fuels.
ARA Fuel Oil inventories fell 13 percent to 0.775 million tonnes in the week to March 21 as a VLCC tanker loaded a cargo. ARA fuel oil inventories were 17 percent lower than year-ago levels. They were also below the five-year average of 1.109 million tonnes for this time of the year.
ARA fuel oil imports in the week to Thursday originated from France, Russia and the UK, while exports were headed to the Suez canal for orders, the data showed. Singapore fuel oil inventories this week slipped to a two-week low of 20.388 million barrels, or 3.043 million tonnes, while in Fujairah, they jumped to a near eight-month high of 10.12 million barrels, or 1.51 million tonnes.
The April 180 cst crack is lower at – $ 0.55 / bbl with the visco spread at $ 1.20 cents/bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh hedges to consider 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 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.