Good morning all. Brent futures were down 5 cents or 0.1% this morning, to $39.56 per barrel whereas the US benchmark, WTI was printing 3 cents lower or 0.1% to $37.23.
Both these benchmarks are set to remain around the $35 to $40 per barrel until heating oil demand picks up in the US, as the driving season has now officially ended for the summer, which has dented demand for oil products in a market where supply is plentiful, which is effectively capping oil’s recovery analysts from Sunward Trading noted. This news follows OPEC’s admission that demand figures for oil have been downgraded, as well as BP reports stating that oil demand may have peaked in 2019. All eyes will be on OPEC on 17th September as it looks to update nations on the updated quotas for oil production to the end of 2020.
Following this bleak outlook, hedge funds have effectively dumped oil at the fastest rate in 2 years. Funds the equivalent of 171 million barrels and took 84 million short positions in some of the most important oil futures, which is in contrast to being neutral on oil at the start of August, to being moderately bullish towards the end, and now being firmly bearish.
The second hurricane in a month is due to make landfall on the US Gulf coast within the week as oil platform operators scrambled to evacuate key strategic assets in the region. 21% of the offshore crude production was shut in a bid to protect life and platforms as much as possible, which is one of the factors that has kept crude in the upper limit of the $35-$40 per barrel as investors see a disruption in supply coming.
And in bunker news, although many global reports the falling demand for fuel oil, Singapore has reported a 13% increase in demand for the product year on year. Reports also suggest that fuel oil sales are 5% higher to August than the same period last year, with the main winners 3.5% sulphur and 0.1% sulphur.
MARKETS NEWS:
* Nigeria’s Bellwether Oil Grades Slow to Sell in Bearish Sign
* OIL ALLOCATIONS: Iraq Gives Full Oil Vols to At Least 3 in Asia
* EIA Sees U.S. Shale-Oil Falling 68K B/D to 7.64M B/D in Oct.
* China’s Aug. Apparent Oil Demand Rises 9.9% Y/y
* French August Road Fuel Consumption Falls 3.6%, Ufip Says
* Pertamina Aims to More Than Double Oil Production by 2024
* U.S. Imports of European Jet Fuel Persists; Gasoline Flows Dip
* Benchmark VLCC Rates Rise; Baltic-Europe Clean Tankers Jump
* USG-EUROPE CRUDE TRACKER: September Arrivals to Stay High
OTHER NEWS:
* Australia Unveils ‘Gas-Fired’ Plan to Fuel Economic Revival
* Trump Denies Oil Refiners’ Push for Biofuel Exemptions
* Ecopetrol Losing 2,500 Barrels of Oil a Day From Illegal Taps
* Ecopetrol to Prepay Local, International Short-Term
Obligations
* Hurricane Sally Is Lurking East of Mississippi River’s Mouth
** Shell Curtails Ops at 3 Gulf Oil Platforms for Storm Sally
** Gulf of Mexico Producers Shut 21% of Oil Output: BSEE
** Kinder Morgan Shuts Port Sulphur Oil Terminal Ahead of Storm
PHYSICAL CRUDE NEWS:
* ASIA: Oil Sellers Brace for Price Battle; Trafigura’s View
* LATAM: Iranian Condensate to Venezuela; Tipco Winds Down
* US/CANADA: Genesis CHOPS Pipe Won’t Restart Before Oct. 1
* NSEA: Equinor Sells Troll to Vitol; Mercuria Bids 3 Grades
* MED: Tenergy Offers Siberian Light Lower; U.S. Flows High
* WAF: Nigeria’s Crude Sales Struggle; Prices Slump for Asia
OIL PRODUCT NEWS:
* U.S.: New Orleans, Neighbors Get Ready For Sally
* EUROPE: Flow to U.S. Falls; Neste Shutting Refinery
* ASIA: India Mogas, Diesel Demand to Recover in 2021
ECONOMIC EVENTS: (Times are London. )
* 9am: IEA Monthly Oil Market Report
* 9:30pm: API weekly oil inventory report
ANALYST COLUMNS:
* U.S. Gasoline Demand -2.1% to 8.619M B/D Last Week: Descartes
* BofA Sees Crude Spreads Remaining Tight on Slow Supply Recovery
OTHER FINANCIAL MARKETS:
* Asian Stocks Drift; China’s Yuan Extends Advance: Markets Wrap
(Bloomberg Data/News)
Singapore 380 INDIC
Oct20 230.25 / 232.25
Nov20 230.75 / 232.75
Dec20 232.50 / 234.50
Jan21 234.75 / 236.75
Feb21 237.00 / 239.00
Mar21 239.25 / 241.25
Q4-20 231.25 / 233.25
Q1-21 237.00 / 239.00
Q2-21 243.75 / 245.75
Q3-21 248.00 / 251.00
CAL21 245.00 / 248.00
Rotterdam 3.5% INDIC
Oct20 218.00 / 220.00
Nov20 217.00 / 219.00
Dec20 217.00 / 219.00
Jan21 219.25 / 221.25
Feb21 221.25 / 223.25
Mar21 223.25 / 225.25
Q4-20 217.50 / 219.50
Q1-21 221.25 / 223.25
Q2-21 227.25 / 229.25
Q3-21 231.00 / 234.00
CAL21 228.00 / 231.00
Singapore VLSFO 0.5% INDIC
Oct20 295.25 / 300.25
Nov20 296.25 / 301.25
Dec20 298.00 / 303.00
Jan21 300.25 / 305.25
Feb21 302.50 / 307.50
Mar21 304.75 / 309.75
Q4-20 296.50 / 301.50
Q1-21 302.50 / 307.50
Q2-21 308.75 / 314.75
Q3-21 315.25 / 321.25
CAL21 311.50 / 317.50
Rott VLSFO 0.5% INDIC
Oct20 272.00 / 277.00
Nov20 273.75 / 278.75
Dec20 275.75 / 280.75
Jan21 278.75 / 283.75
Feb21 281.75 / 286.75
Mar21 284.50 / 289.50
Q4-20 273.75 / 278.75
Q1-21 281.50 / 286.50
Q2-21 288.75 / 294.75
Q3-21 295.25 / 301.25
CAL21 291.25 / 297.25
Sing 10ppm GO INDIC
Oct20 43.38 / 43.52
Nov20 43.83 / 44.03
Dec20 44.31 / 44.51
Jan21 44.80 / 45.00
Feb21 45.32 / 45.52
Mar21 45.86 / 46.06
Q4-20 43.85 / 44.05
Q1-21 45.32 / 45.52
Q2-21 46.84 / 47.04
Q3-21 48.31 / 48.51
CAL21 47.34 / 47.74
ICE Gasoil 10ppm INDIC
Oct20 323.68 / 325.68
Nov20 328.56 / 330.56
Dec20 333.13 / 335.13
Jan21 338.39 / 340.39
Feb21 343.63 / 345.63
Mar21 347.60 / 349.60
Q4-20 328.45 / 330.45
Q1-21 343.20 / 345.20
Q2-21 354.38 / 356.38
Q3-21 368.59 / 370.59
CAL21 360.91 / 362.91
Rott Hi5 Sing Hi5
Oct20 55 66
Nov20 58 67
Dec20 60 67
Jan21 61 67
Feb21 62 67
Mar21 63 67
Q4-20 58 67
Q1-21 62 67
Q2-21 64 67
Q3-21 66 69
CAL21 65 68