Oil prices fell on Thursday, retreating from an 8 percent rally in the previous session as the oil market focused on signs of faltering global economic growth and record production of crude. Brent crude futures dropped $2.31, to settle at $52.16 a barrel. WTI crude futures fell $1.61 to settle at $44.61 a barrel.
Prices gave up half of yesterday’s gains. They had surged on Wednesday, tracking a spike on Wall Street after President Donald Trump’s administration attempted to shore up investor confidence.
U.S. stocks retreated for most of the session on Thursday, dragging oil prices, before roaring back to end in positive territory.
The rise in crude stocks to 448.2 million barrels had market participants further worried about a glut in supplies. Analysts had expected a decrease of 2.9 million barrels.
Gasoline stocks also built significantly. Distillate stocks continue to stay low which may augur well for refining margins.
Official U.S. government data will be released on Friday.
No fresh news on the naphtha markets today.
The January crack has strengthened to -$ 1.90 /bbl
Asia’s gasoline crack reached a two-session low of 35 cents a barrel on Thursday on higher stockpiles. But despite a fall of almost 71 percent from the previous day, the current crack level remained at a premium after trading at a discount against Brent for most of this month.
As for weekly gasoline inventories, levels were higher in Singapore and Japan along with the U.S. Singapore light distillates stocks surged 17.46 percent of 2.18 million barrels to hit a 4-1/2 month high of 14.6 million barrels in the week to Dec. 26.. This was 12.3 percent higher than a year ago. Japan’s gasoline stocks also reflected an increase of 180 KB to 10.57 million barrels in the week to Dec. 22.
The January crack is lower at $ 2.10 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash discounts for gasoil with 10ppm sulphur content were at 93 cents a barrel to Singapore quotes on Thursday, compared with a discount of 98 cents a barrel on Wednesday.
Battered by inflated stock levels in the region, cash differentials for the benchmark gasoil grade have steadily declined since hitting this year’s peak of $1.86 a barrel on Oct. 24, when demand was stronger.
Middle distillate inventories in Singapore climbed 414,000 barrels to a nearly nine-month high of 11.5 million barrels in the week to Wednesday.
Diesel exports from China, which is pivotal for the overall supplies in the region, would be higher in December compared with November. China exported 1.23 million tonnes of diesel in November, down 37.5 percent year-on-year. In order to consume the additional export quotas and for better margins amid weaker domestic prices, China’s December export volumes for diesel would be much bigger. Last month, China released 2 million tonnes of additional fuel export quotas for this year, taking total 2018 quotas to about 48 million tonnes.
Cash discounts for jet fuel widened to $1.21 a barrel to Singapore quotes on Thursday, as against a discount of $1.19 a barrel on Wednesday. Jet fuel refining margins fell to $14.79 a barrel over Dubai crude on Thursday, from $15.45 a barrel on Wednesday.
The January crack is lower at $ 12.25 /bbl with the 10 ppm crack at $ 13.20 /bbl. The regrade is stronger at $ 2.65 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
The front-month 380-cst barge fuel oil crack moved on Thursday to its narrowest discount to Brent crude for three weeks, despite a spike in crude oil prices since Wednesday. The narrower crack reflected expectations of tighter fuel oil arbitrage volumes in January, compared with December.
The crack discount was at minus $6.27 a barrel to Brent crude, up from minus $7 a barrel in the previous session; and the narrowest discount since Dec. 5.
Meanwhile, Singapore fuel oil inventories slipped 3 percent to a two-week low in the week ended Dec. 26, even though net import volumes increased and held above the 2018 weekly average.
The January 180 cst crack is higher at $ 0.15 / bbl with the visco spread at $ 0.55 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Fuel oil cracks are still strong. The regrade appears to be staying strong as a consequence of Jet hedging by consumers.
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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.