Crude Oil
Crude oil prices were mixed as markets were still uncertain about ecnomic recovery.
Brent futures settled 3 cents higher at $55.90 a barrel. WTIs future settled 16 cents lower at $52.61 per barrel.
The International Monetary Fund, upgraded the outlook for 2021 global GDP growth to 5.5%, up 0.3 percentage
points from its previous forecast last October, citing “expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies.” Global GDP shrank by 3.5% in 2020, the Fund said.
Oil prices will average just above $50/bbl in 2021, a more than 21% rise from 2020’s depressed level, as the rollout of vaccines and fiscal stimulus programs will help the global economy post a stronger-than-expected recovery, the IMF said.
PDVSA’s inventories of its main export crude grade, Merey 16, dipped this week to their lowest levels since late Nov’20, falling to 4.85 MB as of 25 Jan’21, down from 9 MB on 21 Dec’20, as exports by PDVSA and its joint ventures rise despite sanctions.
Iranian oil exports are climbing in Jan’21 after a boost in Q4’20 despite US sanctions, with Petro-Logistics saying Iranian crude exports were set to exceed 600 KB/D this month for the first time since Apr’19, after rising by 100 KB/D in Q4’20.
India’s oil product exports fell 10.2% YoY to 57.72 MMT in 2020, or 1.24 MB/D, provisional data from the PPAC showed Tuesday, as global demand for fuels shrank due to the coronavirus pandemic.
api changes
The API reported a fairly large draw in crude stocks yesterday. Products, however, built quite considerably as well, mitigating the bullish aspect of the draw. We will await the official results today.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,165,190 (+15,879 DoD) yesterday. The total number of active cases fell by around 70,000 DoD to 25.82 million DoD. (Click here for details).
Naphtha
Asia’s naphtha crack dipped on Tuesday to $ 98..85 per tonne on Tuesday, down from $100.65 per tonne a day earlier.
This is close to its weakest level in over two weeks, as availability of adequate regional supplies offset relatively steady petrochemicals demand.
The February crack is higher at $2.00 /bbl.
Gasoline
Asia’s gasoline crack dropped to $3.85 per barrel on Tuesday, down from $4.04 a barrel on Monday.
Traders were worried renewed lockdowns and mobility restrictions to contain the spread of the coronavirus in several markets would likely hurt near-term demand for the transportation fuel.
India’s petrol exports rose 5.6% to about 950,000 tonnes in December from 900,000 tonnes in November, government data showed. The December exports were 28.6% lower year on year, the data showed.
The February crack is higher at $5.00 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10 ppm sulphur content were at a discount of 26 cents a barrel to Singapore quotes, the widest discounts since Jan. 8. They were at a discount of 24 cents per barrel on Friday.
The February/March time spread for 10 ppm gasoil widened its contango by a cent on Monday to trade at a discount of 16 cents per barrel.
The gasoil EFS traded on Monday at minus $6.56 per tonne, which typically makes it unworkable for arbitrage shipments. The lack of East-West arbitrage opportunities are still keeping the Asian barrels locked within the region as gasoil stocks held in ARA were at a more than two-month high last week.
India exported 2.65 million tonnes of diesel in December, compared with 2.24 million tonnes in November, and 3.14 million tonnes in December 2019, government data showed. The country also exported about 310,000 tonnes of jet fuel in December, compared with 270,000 tonnes in November and 660,000 tonnes in December 2019, data showed
Cash differentials for jet fuel were at a discount of 26 cents per barrel to Singapore quotes, compared with a discount of 28 cents per barrel a day earlier.
Global scheduled flight seats fell for a fifth consecutive week to be at 51.9% lower in the week to Monday year-on-year, compared with a 50% drop in the preceding week, according to aviation data firm OAG.
Scheduled flight seats in China were down 23% year-on-year in the week to Jan. 25, compared with a 14.7% drop in the previous week, while flight seats in South Korea were 56.6% lesser from the corresponding period last year, as against a 56% drop last week, OAG data showed.
The February crack for 500 ppm Gasoil is marginally lower at $4.60 /bbl with the 10 ppm crack at $ 5.45 / bbl. The regrade is at -$ 1.50 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash premiums for cargoes of Asia’s 0.5% very low-sulphur fuel oil (VLSFO) hit an 11-month high of $5.20 a tonne to Singapore quotes on Tuesday, despite an absence of deal activity in the Singapore trading window, but further upside is likely to be limited as excess utility demand starts to fade, trade sources said.
The VLSFO market has firmed in recent weeks as fuel supplies tightened on limited refinery output and lower arbitrage supplies, as well as an unexpected rise in feedstock demand from utilities amid surging natural gas prices.
The January crack for 180 cst FO is steady higher at -$3.20 /bbl with the visco spread at $0.55 /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.