Oil prices extended the previous day’s sharp decline on the impact renewed coronavirus lockdowns could have on oil demand.
Brent crude futures fell $1.47 to settle at $37.65 a barrel. The more active January contract lost 4% to settle $38.11 a barrel. WTI crude futures fell $ 1.22 to $36.17 per barrel.
During the session, the Brent contract traded as low as $36.64, the lowest in five months. U.S. West Texas Intermediate (WTI) crude futures settled at $36.17 a barrel, down $1.22, or 3.26%. The contract touched its lowest since mid-June at $34.92.
Gulf OPEC producers, the UAE and Kuwait, as well as Iraq, are debating whether they should roll over existing oil supply cuts into 2021, as they struggle to stick to their agreed reductions, OPEC and industry sources said.
An estimated 1.57 MB/D of crude production and 1,561 MMcf/d of natural gas production was shut in, reflecting 84.8% and 57.6% of US Gulf output, according to the US BSEE. Refiners are beginning to restart, now that the storm has passed.
At a global level, the death toll from the COVID-19 virus rose to 1,185,738 (+7,172 DoD) yesterday. The total number of active cases rose by around 300,000 DoD 11.14 million. (Click here for details).
With COVID-19 cases surging across Europe, France will require people to stay at home for all but essential activities from Friday, while Germany will shut bars, restaurants and theatres from Nov. 2 until the end of the month.
Asia’s naphtha crack rose to reach a 1-week high of $71.13 a tonne on Thursday while gasoline premiums to Brent hit a 5-session high of $2.85 a barrel on inventory drawdowns.
The Front-month contango for open-specification naphtha persisted at $7.50 a tonne, its lowest since April.
The November crack is lower at $ 2.10 /bbl
Singapore onshore light distillates inventories dropped 15.7% to a near 11-1/2 month low of 11.2 million barrels in the week to Wednesday. This was just 1.6% higher than inventories from a year ago.
India’s BPCL is running its refineries at an average rate of 86% riding on improved demand for gasoline that has reached pre-coronavirus levels as the economy unlocks, company officials said Thursday.
The November crack is lower at $ 2.20 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asian jet fuel refining margins rose to their strongest in three weeks on Thursday, but market was concerned any upside to the aviation fuel market would be limited as long as long-haul international flights remain grounded due to COVID-19 restrictions.
Refining margins for jet fuel in Singapore rose by 55 cents to $1.57 per barrel over Dubai crude during Asian trading hours, a level not seen since Oct. 8. The cracks for the aviation fuel, which have gained about 27% in the last week, have found some support from a marginal improvement in regional aviation demand in recent weeks, with China’s domestic aviation fuel consumption rebounding to near pre-COVID-19 levels.
Cash differentials for jet fuel were at a discount of 59 cents a barrel to Singapore quotes on Thursday, compared with a discount of 63 cents per barrel a day earlier.
China’s Unipec has loaded a VLCC with diesel and is set to ship it to the West next month, the second to be shipped to the West this year, as traders in Asia exploit low shipping costs to use bigger vessels to move excess supplies in bulk volumes.
The November crack for 500 ppm Gasoil is lower at $2.45 /bbl with the 10 ppm crack at $ 3.25 / bbl. The regrade is at -$ 1.00 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s front-month crack for 0.5% VLSFO climbed on Thursday, but the market was concerned bunkering demand would take a hit from the persistent rise in COVID-19 infections across the globe.
The front-month VLSFO crack were at $8.87 per barrel against Dubai crude during Asian trade, up from $8.29 per barrel a day earlier.
The cash differential for Asia’s 0.5% VLSFO was at a premium of $1.38 a tonne to Singapore quotes, compared with $1 per tonne on Wednesday.
Meanwhile, Asia’s cash premium for 380-cst HSFO rose by 37 cents to $2.37 per tonne to Singapore quotes, backed by firmer buying interests in the Singapore physical trade window.
Meanwhile, fuel oil inventories in the Fujairah bunkering and storage hub fell 4% in the week to Oct. 26, falling back towards a multi-month low hit earlier in the month.
The November crack for 180 cst FO is higher at $0.35 /bbl with the visco spread at $0.90 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh trades 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.