Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil bulls scored a ninth straight winning week as market attention again turned to the three-year lows in inventories at the U.S. storage hub for crude, even as natural gas and coal prices that supported a recent broad rally in energy turned lower on the week.

Brent crude settled up 92 cents, or 1.1%, at $83.53 per barrel. Brent hit a three-year high of $86.10 on Thursday. It rose almost 1% on the week for a seven-week gain of 15%.

WTI crude settled up $1.26, or 1.5%, at $83.76 per barrel. WTI fell to as low as $80.81 on Thursday but on Friday it reached a peak of $83.86, just a dime below Thursday’s seven-year high of $83.96. For the week, it rose 1.8%, for a cumulative nine-week gain of 34%.

Oil markets rebounded strongly on Friday as focus returned to plummeting inventories at the Cushing, Oklahoma storage hub for crude. “The issue is that there is not going to be any opportunity to restock Cushing in the next 3-5 months as  runs  should stay high,” said Scott Shelton, energy futures broker at ICAP in Durham, North Carolina. “But it will be a volatile trade.”

U.S. energy firms last week cut oil and natural gas rigs for the first time in seven weeks even as oil prices rose, energy services firm Baker Hughes Co said in its closely followed report on Friday. U.S. oil rigs fell 2 to 443 this week, while gas rigs rose 1 to 99. That was the first decline for oil rigs and the first increase in gas rigs since early September.

Reflecting strong market sentiment, money managers raised their net long U.S. crude futures and options positions in the week to October 19, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

At a global level, the death toll from the COVID-19 virus rose to 4.96 Million (+4,678 DoD) yesterday. The total number of active cases rose by 50,000 DoD to 18.02 million. (Click here for details).

Asia’s naphtha crack rose to $155.10 a tonne, the strongest since July 2014, from $149.43 in the last session. The margin gained over 2% on the week as feedstock demand from petrochemical units supported prices.

Naphtha inventories at the ARA hub also rose to 247,000 tonnes in the week to Thursday from 244,000 tonnes.

The November crack is higher at $5.10 / bbl.

Asia’s gasoline crack eased slightly to $14.14 a barrel from $14.79 in the previous session. It reported a 16% weekly gain and has nearly doubled this month, as easing mobility curbs in several Asian countries prompted a rise in consumption.

Gasoline stocks held in ARA rose to 776,000 tonnes in the week to Oct. 21 from prior week’s 748,000 tonnes.

The November crack is higher at $13.50 / bbl.

Click Here for a graphical depiction of Global Gasoline stocks by region.

Asia’s cash premiums for 10 ppm gasoil extended gains on Friday to hit their highest level in more than 15 months, buoyed by firmer demand for physical cargoes amid tighter supplies.

Asia’s cash differentials for 10 ppm gasoil rose 7 cents to a premium of 77 cents per barrel to Singapore quotes.

The front-month time spread for 10 ppm gasoil widened its backwardation on Friday to trade at 95 cents per barrel.

Refining margins, also known as cracks, for 10 ppm gasoil slipped 14 cents to $14.35 per barrel over Dubai crude during Asian trading hours, posting an 8.2% weekly drop on Friday.

India’s October-loading diesel exports are assessed at 1.32 million tonnes and are expected to close below September’s revised total of 2.36 million tonnes, amid rebounding domestic demand in Q4 as the country transitions out of the monsoon season and into the peak demand festive Diwali season in November.

Gasoil stocks in ARA rose  10% to 2.2 million tonnes in the week ended Oct. 21, according to Dutch consultancy Insights Global.

Jet cash differentials rose by a cent to a premium of 21 cents per barrel to Singapore quotes.

ARA jet fuel inventories climbed 1% this week to 884,000 tonnes.

The November crack for 500 ppm Gasoil is lower at $12.40 /bbl with the 10 ppm crack at $ 14.10 /bbl. The regrade is at $ 0.10 /bbl. 

Click Here for a graphical depiction of Global Distillate stocks by region.

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack climbed to a near eight-month high on Friday as the supply outlook tightened from refiners switching to production of more higher-margin middle distillates.

The front-month VLSFO crack jumped to $14.66 a barrel above Dubai crude by Asia close, up from $13.94 a barrel on Thursday and its highest since Feb. 26, Refinitiv Eikon data showed.

Fuel oil stocks in the ARA refining and storage fell by 72,000 tonnes to 1.04 million tonnes in the week ended Oct. 21, data from Dutch consultancy Insights Global (IG) showed. Compared with last year, the inventories at the ARA hub were 30% lower and below the five-year seasonal average of 1.16 million tonnes.

The November crack for 180 cst FO is lower at  -$7.00 /bbl with the visco spread at $1.25 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

No fresh trades for 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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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