Crude Oil
Oil prices were steady on Friday as well with both markers ending only marginally lower.
Brent crude fell 2 cents to settle at $41.92 a barrel. WTI crude settled down 6 cents at $40.25.
Oil fell more than 2% on the week as COVID-19 cases surged globally and the spectre of rising oil supply looms in the coming weeks. Brent dropped 2.9% for the week and WTI sunk 2.1%.
Russia expects its oil output to increase after the current OPEC+ deal runs its course in Apr’22. Russia expects to produce 507.4 MMT of oil this year, and expects to increase production over the next three years to 560 MMT, or 11.2 MB/D, in 2023.
Iranian oil exports have risen sharply in Sep’20 in defiance of US sanctions, with TankerTrackers estimating exports rose to 1.5 MB/D, throwing a lifeline to the Islamic Republic and its collapsing economy.
Norwegian oil firms plan to close down 22% of the country’s oil and gas output, or 900 KBOE/D, if workers go on strike next week, the Norwegian Oil and Gas Association (NOG) said on Friday.
US energy firms added 4 oil rigs in the week to 25 Sep’20 to total 183 (-530 YoY) according to Baker Hughes, as some drillers return to the wellpad now that crude prices have held gains made since recovering from coronavirus-linked lows in the spring.
Money managers raised their net long US crude futures and options positions by 17,754 contracts to total 326,097 in the week to 22 Sep’20, the US CFTC said on Friday.
covid 19
At a global level, the death toll from the COVID-19 virus rose past the 1 million mark to 1,002,158 (+3,873 DoD) yesterday. After several consecutive days of rise, the total number of active cases rose by around 75,000 over the weekend to 7. 67 million. (Click here for details).
Naphtha
Asia’s naphtha crack hit a 2-1/2 month high of $92.33 a tonne.
The October crack is higher at $ 2.80 / bbl.
Gasoline
Asia’s gasoline premium to Brent crude recovered by about 16.8% to a one-week high of $4.81 a barrel on Friday.
Gasoline stocks at ARA edged up 0.38% to a two-week high of 1.307 million tonnes in the week to Thursday.
The October crack is higher at $ 5.05 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for 10 ppm gasoil were at a discount of 66 cents a barrel to Singapore quotes on Friday, compared with a discount of 63 cents per barrel a day earlier.
India’s gasoil exports this month are expected to close slightly higher than August, while Chinese exports would likely remain elevated through the fourth quarter.
The gasoil EFS traded around minus 92 cents per tonne on Friday, typically making it unworkable for arbitrage shipments.
The October crack for 500 ppm Gasoil is higher at $1.75 /bbl with the 10 ppm crack at $ 2.25 / bbl. The regrade is at -$ 2.22 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash differentials for Asia’s 0.5% VLSFO jumped to a six-month high, flipping to a premium for the first time since early-August amid strong deal values in the Singapore trading window. The VLSFO cash differential jumped to 96 per tonne above Singapore quotes, its highest since March 13 and up from a 33 per tonne discount on Thursday.
The October crack for 180 cst FO is higher at – $2.75 /bbl with the visco spread at $0.90 /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.