Crude Oil
Oil prices rose on Friday, bringing an end to another week of losses.
Brent futures settled 11cents higher to settle at $21.44 /bbl. WTI rose 44 cents to settle at $16.94.
Oil futures marked their third straight week of losses, with Brent ending down 24% and WTI off around 7%.
Traders expect demand to fall short of supply for months due to the economic disruption caused by the pandemic. Producers may not be slashing output quickly or deeply enough to buoy prices, especially when global economic output is expected to contract by 2% this year, worse than the financial crisis. After trading near unchanged for most of the day, the benchmarks rebounded in the afternoon.
Russia plans to halve oil exports from its Baltic and Black Sea ports in May’20. According to the loading schedule, Russian exports next month will total 1.3 MB/D down from 2.2 MB/D in Apr’20.
Saudi Aramco began reducing oil production earlier this week from about 12 MB/D to achieve the agreed level of 8.5 MB/D ahead of the 1 May’20 start date for OPEC+ output cuts, according to a Saudi industry official familiar with the matter.
China’s Mar’20 crude oil imports rose 4.5% YoY to 9.68 MB/D, with its crude oil imports from Saudi Arabia fell 1.6% YoY, while purchases from Russia rose 31% YoY, Reuters’ calculations based on customs data showed on Sunday.
US energy firms cut 60 oil rigs in the week to 24 Apr’20 to total 378 (-427 YoY), the lowest since Jul’16, resulting in the largest cut in oil rigs on a monthly basis since 2015, according to Baker Hughes. In Canada, drillers slashed the number of oil and natural gas rigs to a record low.
Money managers raised their net long US crude futures and options positions by 107,777 contracts to total 307,321 in the week to 21 Apr’20, the US CFTC said on Friday.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 206,915 (+3,751 DoD) yesterday, with the total number of confirmed infections at 2,993,262 (+73,858 DoD). (Click here for details).
Italy will allow factories and building sites to reopen from 4 May’20 and permit limited family visits as it prepares a staged end to Europe’s longest coronavirus lockdown, the Italian Prime Minister said on Sunday.
The Chinese city of Wuhan, where the global coronavirus pandemic began, now has no remaining cases in its hospitals, a health official told reporters on Sunday.
Naphtha
Asia’s naphtha crack ended the week at a two-day low of $51.85 a tonne
The May crack has dropped to -$1.35 / bbl.
Gasoline
Asia’s gasoline discounts to Brent widened to $4.21 a barrel versus $2.76 in the previous session as supplies remain high on lack of demand.
ARA Gasoline inventories edged up 2.8% to reach an 8-week high of 1.19 million tonnes in the week to Thursday.
Gasoline cargoes from ARA were seen going to Singapore and China. As demand for gasoline and other transportation fuels has been severely crushed by lockdowns to curb the spread of the virus, more cargoes are sitting onboard vessels as onshore tanks to hold them have ran out.
The May crack has improved to -$4.55 /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 $2.34 per barrel to Singapore quotes on Friday, compared with a discount of $2.40 a barrel in the previous session.
Cash discounts for jet fuel narrowed to $4.48 a barrel to Singapore quotes on Friday, compared with Thursday’s $4.52 a barrel that was the widest cash discount since November 2005.
The May crack for 500 ppm Gasoil has dropped to $2.30 /bbl with the 10 ppm crack at $ 4.50 / bbl. The regrade is at -$ 5.10 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash premiums for Asia’s 0.5% VLSFO held at record lows hit in the previous session amid an absence of demand and ample supplies. VLSFO cash discounts were unchanged from Thursday’s all-time low of minus $15.24 a tonne to Singapore quotes. No VLSFO cargo deals were reported in the Singapore window for a ninth session straight. Buying interest for VLSFO cargoes was also absent with no standing bids for cargoes of the fuel appearing in the window since Monday.
Residual fuel inventories in ARA fell 12% from the previous week to a three-week low of 1.357 million tonnes in the week to April 23. Compared with last year, however, the ARA fuel oil inventories were 55% higher, well above the five-year seasonal average of 1.1 million tonnes.
The May crack for 180 cst FO has improved to -$2.95 /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 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.