Crude Oil
Oil prices continued their stilted rise on Monday with little other changes in ground conditions.
Brent crude settled 7 cents higher at $43.41 per barrel, while WTI rose 31 cents to $41.60 a barrel.
A weak U.S. dollar, which makes dollar-denominated commodities cheaper for holders of other currencies, also helped boost oil futures. The U.S. dollar index reached its lowest level since June 2018, hurt by domestic economic concerns and deteriorating U.S.-China relations.
Urals crude cargoes traded at a discount to dated Brent for the first time in three months on Monday as loadings for the grade were set to rise in Aug’20, while European refiners tried to replace an expensive grade with alternatives.
Senate Republicans on Monday proposed a $1 trillion coronavirus aid package hammered out with the White House, which slashes the expiring supplemental unemployment benefits of $600 a week by two-thirds.
Hedge funds continued buying oil last week, but the focus switched from crude to previously-neglected refined products, purchasing 28 MB in the six most important petroleum futures and options contracts in the week to 21 Jul’20.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 656,085 (+4,202 DoD) yesterday, with the total number of confirmed infections at 16,635,974 (+218,350 DoD). (Click here for details).
Naphtha
Asia’s naphtha crack rose to a near 2-1/2-week high of $85.25 a tonne on Monday, supported by recent demand amid fewer East-bound cargoes.
India’s supplies have also been comparatively low in June and July at below 400 KT each, compared with 816 KT in May.
The August crack is lower at $ 0.85 /bbl
Gasoline
Asia’s gasoline crack rose to a two-session high of $1.30 a barrel.
The August crack is lower at $2.55 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s cash premiums for 10 ppm gasoil dropped on Monday, hurt by muted buying interest for physical cargoes.
Cash premiums for 10 ppm gasoil fell to 32 cents a barrel to Singapore quotes, the lowest level in more than six weeks. They were at a premium of 46 cents a barrel on Thursday.
India’s gasoil exports are projected to close at around 2.1 million tonnes this month, compared with 1.81 million tonnes in June.
The front-month time spread for 10 ppm gasoil in Singapore narrowed its backwardated structure to trade at a premium of 1 cent a barrel on Monday, compared with 13 cents per barrel a week earlier.
The August crack for 500 ppm Gasoil is higher at $6.10 /bbl with the 10 ppm crack at $ 6.90 / bbl. The regrade is at -$ 3.70 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The front-month time spread for Asia’s 0.5% VLSFO fell back into negative territory on concerns over abundant supplies.
The Aug/Sept VLSFO time spread fell to a contango of $1 per tonne, down from a premium of 50 cents a tonne in the previous session.
The front-month time spread had climbed into backwardation last week, as relatively better demand for cargoes of the fuel offset sluggish VLSFO bunker demand as well as ample onshore and offshore stocks.
The August crack for 180 cst FO is higher at – $2.75 /bbl with the visco spread at $0.65 /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.