Crude Oil
Oil prices dropped more than $1 a barrel on Thursday as a growing number of virus-related restrictions on travel slashed global fuel demand. Brent crude futures fell $1.05 to settle at $26.34 a barrel. WTI futures fell $1,89 to $22.60 a barrel.
The head of the IEA said worldwide oil demand could drop as much as 20 million barrels per day, or 20% of total demand, as 3 billion people are currently under stay-at-home orders due to the novel coronavirus outbreak.
The U.S. Department of Energy scrapped a plan to purchase domestic crude oil for its SPR after funding was not included in the broader stimulus package. The U.S. Senate unanimously passed the $2 trillion bill aimed at helping struggling workers and industries hurt by the impact of the coronavirus epidemic, and sent the legislation to the House of Representatives. The House is expected to vote on Friday.
The Russian President announced next week would be a paid non-working week throughout the country. Russian oil and gas producers said Thursday that measures introduced so far to combat the spread of the coronavirus in Russia will not affect oil and gas production and supply.
The number of Americans filing claims for unemployment benefits surged 3.00 million to a seasonally adjusted 3.28 million in the week ending 21 Mar’20, as strict measures to contain the coronavirus pandemic brought the country to a sudden halt.
Covid 19
At a global level, the death toll from the COVID-19 virus rose to 24,087 (+2,804 DoD) yesterday, with the total number of confirmed infections at 532,224 (+61,189 DoD). (Click here for details).
The number of US coronavirus infections climbed above 82,000 on Thursday, surpassing the national tallies of China and Italy, as New York, New Orleans and other hot spots faced a surge in hospitalizations and looming shortages of supplies, staff and sick beds.
Naphtha
Asia’s naphtha crack more than doubled from the previous session, hitting a three-session high of $23.83 a tonne on Thursday, as Brent crude raw material prices fell.
But spot prices of naphtha sold to South Korea has been falling over the weeks as some crackers kept their throughput at slightly reduced rates to combat eroded profits while some others were idled for scheduled maintenance.
The April crack has improved to -$4.25 / bbl.
Gasoline
Asia’s gasoline crack rose for the first time since March 20. The crack ended the session at a discount of $5.19 a barrel, compared with a discount of $6.62 a barrel, which was at its lowest since 2008.
Singapore’s onshore light distillates inventories rose nearly 1.1 million barrels to 15.245 million barrels, their highest level since April 2019.
The April crack has recovered to -$5.85 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cracks for jet fuel fell on Thursday to $2.29 a barrel over Dubai crude during Asian trade, down from $2.51 per barrel a day earlier. Cracks for the aviation fuel are currently over 71% lower than the historical average for this time of the year in the last 12 years.
Cash discounts for jet fuel widened to $2.45 per barrel to Singapore quotes on Thursday, the widest since November 2008. They were at a discount of $2.28 per barrel on Wednesday.
Cash differentials for 10 ppm gasoil also widened their discounts to 40 cents per barrel to Singapore quotes on Thursday, compared with a 31-cent discount in the previous session.
The regrade, the price spread between jet and gasoil , for April stood at minus $7.18 per barrel on Thursday, compared minus $7.05 on Wednesday.
Singapore onshore middle distillate stocks rose 6.5% to a six-month high of 13.1 million barrels in the week ended March 25, Enterprise Singapore data showed. Weekly middle distillate inventories have averaged 11.3 million barrels so far in 2020, compared with 11.1 million barrels in 2019. Overall, onshore middle distillate inventories were 15.2% higher year-on-year.
The April crack for 500 ppm Gasoil has eased to $10.05 /bbl with the 10 ppm crack at $ 10.65 / bbl. The regrade is at -$ 7.35 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The contango structure in Asia’s front-month 0.5% VLSFO time spread slipped to its widest since mid-October, indicating weak demand and ample supplies. The April/May VLSFO time spread slipped to minus $7 a tonne from minus $6 a tonne in the previous session and its lowest since Oct. 15.
Singapore’s residual fuel oil inventories slipped 2% to a five-week low in the week to March 25, official data showed on Thursday, against a backdrop of below-average net imports volumes. Onshore fuel oil stocks shrank by 494 kb to 24.783 million barrels from the previous week, data from Enterprise Singapore showed. The stocks were 28% higher than the same time last year.
The April crack for 180 cst FO has once again spiked to -$1.70 /bbl with the visco spread at $0.80 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh trades 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.
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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.