Crude Oil
Oil prices were steady on Thursday as a new wave of coronavirus cases in Europe led several countries to reimpose travel restrictions.
Brent crude rose 17 cents to settle at $41.94 a barrel. WTI crude settled up 38 cents at $40.31.
Brent’s premium over WTI is at its smallest closing level since late May when WTI settled higher than Brent on one day.
Crude oil processed by Indian refiners slipped 26.4% YoY, 8.7% MoM in Aug’20 to 3.82 MB/D, the most in four months, as fuel demand remained subdued on skyrocketing coronavirus cases that hindered industrial and transport activity.
Britain, Germany and France imposed new restrictions to stem the coronavirus spread – all factors affecting fuel demand.
Prices were also capped by data showing the number of Americans filing new claims for unemployment benefits unexpectedly increased last week, supporting views the economic recovery from the COVID-19 pandemic was running out of steam amid diminishing government funding.
US Senate Majority Leader Mitch McConnell and other top Republicans on Thursday repudiated the US President’s refusal to commit to a peaceful transfer of power, assuring American voters the lawmakers would accept the outcome of the election.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 987,156 (+6,331 DoD) yesterday. After several consecutive days of rise, the total number of active cases rose by around 52,000 to 7.50 million. (Click here for details).
Naphtha
Asia’s naphtha crack extended gains for the second day to reach a three-day high of $86.53 a tonne.
The October crack is higher at $ 2.45 / bbl.
Gasoline
Asia’s gasoline premium to Brent fell 7% to $4.12 a barrel.
Singapore’s onshore light distillates stocks in the meantime dived 18% from a record high to a three-week low of 14.2 million barrels in the week to Wednesday, data from Enterprise Singapore showed. .
The October crack is higher at $ 4.50 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10 ppm gasoil were at a discount of 63 cents a barrel to Singapore quotes on Thursday, as against a 59-cent discount per barrel a day earlier.
The front-month time spread for gasoil with 10 ppm sulphur content widened its contango on Thursday to trade at a discount of 56 cents a barrel, compared with 49 cents a barrel on Wednesday.
Singapore’s middle distillate inventories rose 2.6% to a three-week high of 15.7 million barrels in the week to Sept. 23, according to Enterprise Singapore data. Weekly Singapore middle distillate inventories have averaged about 13.3 million barrels so far in 2020. This week’s stocks were 14.6% higher year-on-year.
China’s diesel exports in August doubled the levels in July to 1.09 million tonnes. The rebound in exports reversed four months of declines. Exports last month rose versus 550 KT in July but still 18% below the year-earlier level, data from the General Administration of Customs showed.
The October crack for 500 ppm Gasoil is lower at $1.55 /bbl with the 10 ppm crack at $ 2.05 / bbl. The regrade is at -$ 2.22 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO cash discount widened on Thursday, hurt by muted buying interest in the physical market.
The cash discount for Asia’s 0.5% VLSFO was at 33 cents per tonne to Singapore quotes on Thursday, compared with a discount of 15 cents a tonne on Wednesday.
Meanwhile, Asia’s cash premium for 180-cst HSFO inched up 2 cents to $3.90 per tonne to Singapore quotes on Thursday.
A jump in weekly net import volumes lifted Singapore’s residual fuel oil inventories by 11% to a five-week high in the week ended Sept. 23. Onshore fuel oil stocks rose 2.323 million barrels to 23.633 million barrels according to the Enterprise Singapore data. Residual fuel stocks were up 16% from a year earlier. Net import volumes more than tripled compared to the previous week, jumping to a seven-week high of 1.113 million tonnes and were well above the 2020 weekly average of 674,000 tonnes.
The October crack for 180 cst FO is lower at – $3.15 /bbl with the visco spread at $0.90 /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.