Crude Oil

Oil prices edged higher on Friday as political turmoil in Venezuela threatened to tighten crude supply, but concerns over surging U.S. fuel stocks and global economic woes weighed on sentiment. Brent crude oil futures rose  55 cents to settle at $61.64 a barrel. WTI futures, rose 56 cents to settle at $ 53.69 a barrel. 

For the week, Brent lost 1.7% while WTI shed around 1%, their first weekly decline in four weeks.

Venezuela’s opposition leader Juan Guaido declared himself interim president last week, winning backing from Washington and large parts of Latin America, including Brazil and Colombia. That prompted Nicolas Maduro, the country’s leader since 2013, to cut ties with the U.S., which signaled it could impose sanctions on Venezuela’s oil exports.

The ongoing U.S. China trade dispute and broader gloom over world economic growth, however, put a check on prices.

U.S. energy firms this week increased the number of oil rigs operating for the first time this year. Drillers added 10 oil rigs in the week to Jan. 25, bringing the total count to 862.


Asia’s naphtha crack recovered from an eight week low in the previous day to a five session high of $35.28 a tonne following a series of purchases this week.

Buyers this week included South Korea’s Hanwha Total, SK Energy, GS Caltex, YNCC, Japan’s Idemitsu and China’s CNOOC. But the naphtha market will remained choppy as high gasoline stockpiles would drag on the former.

The February crack has has recovered to  -$ 6.30 /bbl.


Asia’s gasoline crack was at a discount $2.03 a barrel discount to Brent crude on Friday. This is just about 9 cent’s higher than Thursday’s seven year low.

Refining profits for gasoline are crashing around the world as consumption stalls amid a huge wave of new supplies, resulting in record inventories in Asia, America and Europe. In the U.S. market, gasoline margins sank to $5.70 per barrel on Thursday, the lowest seasonally since 2009, weighed down by weak demand for the fuel and excess supply.

Northwest European gasoline refining margins have already touched seven year lows of minus $3.80 a barrel on Thursday.

More gasoline supplies are expected with at least three mega refineries springing up this year in China and Malaysia. That could help reduce Malaysia’s gasoline imports to 150,000 bpd in 2020 versus 220,000 bpd in 2018.

Gasoline stocks in ARA, were virtually unchanged in the week to Jan. 24 at 1.37 million tonnes. Stocks are 29% over 2018 levels at this time.

The February crack has dropped to  -$ 0.90 /bbl

Click Here for a graphical depiction of Global Gasoline stocks by region.


Cash differentials for 10ppm gasoil narrowed their discounts to 38 cents a barrel to Singapore quotes on Friday, compared with a 43 cent discount the previous day.

ARA Gasoil stocks rose by 47 kt to 2.10 million tonnes in the week to Jan. 24. Stocks are nevertheless 24 per cent below the previous years levels

Cash discounts for jet fuel were at $1.70 a barrel to Singapore quotes, the biggest discounts since December 2008. Discounts are the biggest on record for this time of the year.

The February crack has dropped to $ 12.90 /bbl with the 10 ppm crack at $13.85 /bbl. The regrade is lower at $ 0.55 /bbl.

Click Here for a graphical depiction of Global Distillate stocks by region.

Fuel Oil

Cash premiums of the 380 cst high sulphur fuel oil (HSFO) dropped to a two week low on Friday despite elevated trade liquidity for physical cargoes of the fuel, as selling interest intensified.

The 380 cst fuel oil cash premium fell to $3.40 a tonne to Singapore quotes on Friday, down from $4.05 a tonne in the previous session and its lowest premium since Jan. 9.

Meanwhile, official data this week showed fuel oil inventories in key storage hubs including Singapore, Fujairah and the United States climbing higher while those in the Amsterdam Rotterdam Antwerp (ARA) European hub were lower.

ARA fuel oil inventories fell by 66 KT in the week to Jan. 24 to 1.43 million tonnes, official data released on Thursday showed.

The February 180 cst crack has improved to $ 0.40 / bbl with the visco spread at $ 0.35 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

Hedge Recommendations

Nothing fresh to do or note about the markets 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 refiner.

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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

Leave a Comment