Crude Oil
Oil prices edged up on Monday in sluggish trading with holidays in Singapore, London and New York, as rising concerns over demand recovery offset supply cuts.
Brent rose to $35.81 a barrel by 1659 GMT, while U.S. oil was flat at $33.74 a barrel.
There is no U.S. settlement because of the Memorial Day holiday.
Rising U.S.-China tensions, between the world’s largest oil consumers, over moves by Beijing to impose security legislation on Hong Kong also fueled concerns about the outlook for demand.
India’s crude oil processing in Apr’20 slumped by 28.8% YoY to 14.75 million MT (~3.6 MB/D) its biggest drop since at least 2003, as a nationwide lockdown weighed on fuel demand and forced refiners to cut production.
The US rig count fell by 21 to total 318 in the week to 22 May’20, according to Baker Hughes. Analysts expect energy firms to keep cutting rigs for the rest of the year and keep the count low in 2021 and 2022.
Money managers raised their net long US crude futures and options positions by 23,229 contracts to total 380,211 in the week to 19 May’20, the US CFTC said on Friday.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 347,613 (+1,179 DoD) yesterday, with the total number of confirmed infections at 5,584,267 (+89,812 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack rose for the third day to reach a fresh 3-1/2-week high of $37.15 a tonne to Brent on Friday, as European/Mediterranean cargoes coming to the East in July were expected to fall after May’s volumes hit a record high of 3 million tonnes.
The June crack is lower at -$3.05 / bbl.
Gasoline
Asia’s gasoline crack dived to a discount of $1.18 a barrel to Brent versus a discount of 40 cents in the previous session despite improved demand around the world.
For now, traffic in capitals Berlin and Tokyo has returned to levels seen at the same point in 2019 and traffic in Moscow has significantly risen in May.
Gasoline stocks held in ARA fell 74 KT in the week to Thursday to a two-week low of 1.3 million tonnes. But the current ARA gasoline inventories are 60.8% higher than a year ago at 802,000 tonnes.
Iran is providing Venezuela with 1.53 MB of gasoline and refining components, with the first of five Iranian tankers carrying mooring at a port serving the El Palito refinery in a move criticized by US authorities.
The June crack has flipped back into discount at -$0.30 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for jet fuel narrowed to $2.08 a barrel to Singapore quotes on Friday, compared with $2.61 on Thursday.
The front-month time spread for the aviation fuel in Singapore narrowed its contango structure on Friday to trade at a discount of $1.33 per barrel, compared with $1.60 per barrel a day earlier.
Cash discounts for 10 ppm gasoil were at 76 cents per barrel to Singapore quotes on Friday, compared with 77 cents on Thursday.
China’s diesel exports in Apr’20 fell 9.2% YoY to 2.57 million MT, down from a record 2.83 million MT in Mar’20 according to data from the GAC, as refiners focused on the domestic market after the easing of coronavirus restrictions.
The June crack for 500 ppm Gasoil has improved to $3.40 /bbl with the 10 ppm crack at $ 5.20 / bbl. The regrade is at -$ 1.40 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Ample supplies and sluggish demand dragged Asia’s 0.5% VLSFO crack to a one-week low on Friday despite tumbling crude oil prices. The front-month 0.5% VLSFO crack against Brent crude fell to $5.89 a barrel on Friday, down from $6.47 in the previous session.
The June crack for 180 cst FO is lower at – $3.05 /bbl with the visco spread at $1.30 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action 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.