Crude Oil
Oil prices continued to drop and China and the US engaged in a war of tariffs on Friday. Brent crude futures settled 58 cents lower at $ 59.34 /bbl. WTI crude futures settled $1.18 lower at $54.17 /bbl.
China said on Friday it would impose a tariff of 5% on U.S. crude oil imports for the first time, sending prices down nearly 4% to two-week lows. U.S. President Donald Trump responded later in the day saying starting on Oct. 1, the 25-percent tariffs on $250 billion worth of Chinese goods will rise to 30%. Tariffs on remaining $300 billion due to begin on Sept. 1 will now be set at 15%, versus 10%.
US energy firms this week cut 16 rigs, the deepest since 26 Apr’19, with the rig count falling to the lowest since Jan’18 according to Baker Hughes. The total count was down to 754 from 860 active rigs in the same week a year ago
Naphtha
Asia’s naphtha crack eased to a two-session low of $20.28 a tonne as demand was mostly muted while supplies remained ample.
Despite the weak fundamentals, naphtha shipments arriving in Asia next month from the West including Europe and the Mediterranean are expected to hold at similar levels as of August, at about 1.3 million tonnes. Based on data from consultancy firm IHS Markit, a supply surplus of 100,000 tonnes is expected in September in Asia versus 150,000 to 200,000 tonnes in August.
The September crack is higher at -6.75 / bbl.
Gasoline
Asia’s gasoline crack was also down, reaching a three-session low of $6.17 a barrel, due also to abundant supplies.
China’s gasoline exports in July rose to near-record monthly levels of 1.56 million tonnes, customs data showed on Friday, as refiners stepped up overseas shipments amid a wave of new production and slowing domestic demand.
Gasoline stocks in ARA refining and storage hub dropped by 21.2% to 1.027 million tonnes in the week to Thursday, the lowest since May 30, data from Dutch consultancy Insights Global showed.
The September crack is higher at $ 6.35 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10ppm sulphur content fell to 30 cents a barrel to Singapore quotes on Friday, compared with a premium of 36 cents per barrel a day earlier.
Cash premiums for jet fuel were at 15 cents a barrel to Singapore quotes on Friday, down from a premium of 17 cents a barrel in the previous session.
Gasoil Stocks in ARA fell by 129 KT to 2.78 million tonnes in the week to August 21.
The September crack for 500 ppm Gasoil has increased to $ 15.20 /bbl with the 10 ppm crack at $ 16.05 / bbl. The regrade is at + $ 0.75 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash premiums for 380-cst fuel oil jumped on Friday amid strong buying interest, but buyers still failed to attract suppliers in the Singapore trading window. The Sept 380-cst barge crack was trading at about minus $15.55 a barrel against Brent.
The front-month 380-cst high-sulphur fuel oil (HSFO) barge crack narrowed its discount to Brent, ending the week on a firmer footing. The front-month barge crack was at minus $16.15 a barrel against Brent on Thursday and at minus $15.94 at the start of the week.
Fuel oil inventories in ARA rose by 103 KT to 1.16 million tonnes.
The September 180 cst crack is higher at – 5.00 / bbl with the visco spread at $ 1.90 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh recommendations 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 refiner.
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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.