Brent front month futures were printing this morning at $41.58 per barrel, 14 cents up or 0.3% with its American counterpart WTI futures registering at $39.50 per barrel or 19 cents up.
Key news out of Monday was that excess jet fuel has now made its way into the fuel oil market and is now being used as a blending product along with gasoil and diesel as refiners have taken a hit on the low margins. The aviation industry has been one of the biggest losers during the course of the Pandemic and with such an excess supply, attention has turned to producing VLSFO for the maritime industry, which would have been unthinkable just under a year ago. Experts in the airline industry do not expect to see levels like that in 2019, until 2024 and therefore the use of middle distillates in the production of marine fuels may be a staple in the market. (World Oil)
Crude oil remains rangebound as although positive news came from the EIA of a US stock draw, Libya’s NOC lifts force majeure which has raised concerns over oversupply, much to the annoyance of OPEC+ who try to facilitate oil quotas to the tune of 7.7 million bpd. Refiners are reported to be cutting production as Coronavirus recovery demand stalls, noted especially in China as independent refiners who took advantage of low crude prices in April now face excess supply and will cut output but 5-10%. (Reuters)
Storm Beta, a tropical storm brewing off the US Gulf Coast is scheduled to make landfall over the next few days with companies such as Shell evacuating key assets overnight. It is the first time since 2005 that meteorologists have used Greek terms to name storms, having exhausted names before the season began. 37 platforms remained unstaffed of the 149 that were initially evacuated for Hurricane Sally. (Hellenic Shipping News)
Wider macro news comes as the UK faces a tipping point as Coronavirus cases become verging on the edge of uncontrollable as with the rest of Europe. This signalled uncertainty around the markets, with Banks and Airlines meaning the FTSE 100 lost 3% over the course of Monday, lowest since June. (World Oil)
MARKETS NEWS:
* Chinese Private Refiners Want More Oil-Import Quota After
Spree
* Tropical Storm Beta Unleashes Heavy Rain, Floods on Texas
Coast
* Corpus Christi Shipping Halted Ahead of Tropical Storm Beta
* Asia Diesel Profit Margins Sink Lower Than Peak Virus Hit:
Chart
* North Sea Floating Storage Shows Sign of Re-Emerging in Europe
* Here’s What to Watch as Libya’s Oil Industry Starts Up Again
* For Oil to Rise, OPEC’s Spare Capacity Must Fall: BNEF Chart
* U.S. Gasoline Demand Declined 0.4% Last Week: GasBuddy
OTHER NEWS:
* Fracking Servicer FTS International Will File for Bankruptcy
* Occidental to Pay Buffett Dividend in Cash, Signaling
Confidence
* Trump to Block Offshore Oil Drilling Near N.C., Tillis Says
PHYSICAL CRUDE NEWS:
* ASIA: Nayara Buys Basrah Heavy; Libya Moves to Reopening
* LATAM: Petrobras Refinery Sale; Venezuela Gasoline
* US/CANADA: U.S. Gets 1st Neutral Zone Ratawi in 4 Years
* NSEA: Totsa Buys Brent; Floating Storage May Re-Emerge
* MED: Baltic Urals Set Higher in 10-Day Plan; Surgut Tender
* WAF: Sonangol Offers Girassol; PTT, Ancap Seek Oil Supply
OIL PRODUCT NEWS:
* U.S.: Beta Floods Texas Coast on Approach to Shore
* EUROPE: Gasoil Bulls Retreat; Gasoline to U.S.
* ASIA: Jet Fuel Now Being Blended for Use by Ships
ECONOMIC DATA/EVENTS: (Times are London.)
* 9:30pm: API weekly oil inventory report
* Rystad Energy Americas summit
** See OIL WEEKLY AGENDA for this week’s events
ANALYST VIEWS/COLUMNS:
* U.S. Gasoline Demand +1.3% to 8.734M B/D Last Week: Descartes
* More OPEC Supply Cuts Likely to Be Needed This Winter: Stratas
* Oil and Gas Project Sanctioning to Recover in 2021: Rystad
* Why Saudi Arabia Wants to Scare Oil Traders: Julian Lee
OTHER FINANCIAL MARKETS:
* Asia Stocks Dip on Virus Fears; Dollar Holds Gain: Markets
Wrap
Singapore 380 INDIC
Oct20 238.75 / 240.75
Nov20 239.25 / 241.25
Dec20 240.25 / 242.25
Jan21 242.25 / 244.25
Feb21 244.00 / 246.00
Mar21 245.75 / 247.75
Q4-20 239.50 / 241.50
Q1-21 244.00 / 246.00
Q2-21 249.25 / 251.25
Q3-21 253.00 / 256.00
CAL21 249.75 / 255.75
Rotterdam 3.5% INDIC
Oct20 226.00 / 228.00
Nov20 226.00 / 228.00
Dec20 226.00 / 228.00
Jan21 227.50 / 229.50
Feb21 229.25 / 231.25
Mar21 231.00 / 233.00
Q4-20 226.00 / 228.00
Q1-21 229.25 / 231.25
Q2-21 234.50 / 236.50
Q3-21 237.25 / 240.25
CAL21 233.75 / 239.75
Singapore VLSFO 0.5% INDIC
Oct20 300.00 / 305.00
Nov20 300.50 / 305.50
Dec20 301.50 / 306.50
Jan21 302.75 / 307.75
Feb21 304.00 / 309.00
Mar21 305.25 / 310.25
Q4-20 300.50 / 305.50
Q1-21 304.00 / 309.00
Q2-21 307.75 / 313.75
Q3-21 312.75 / 318.75
CAL21 310.50 / 316.50
Rott VLSFO 0.5% INDIC
Oct20 276.00 / 281.00
Nov20 277.25 / 282.25
Dec20 278.75 / 283.75
Jan21 281.25 / 286.25
Feb21 283.75 / 288.75
Mar21 286.25 / 291.25
Q4-20 277.25 / 282.25
Q1-21 283.75 / 288.75
Q2-21 290.75 / 296.75
Q3-21 297.25 / 303.25
CAL21 293.25 / 299.25
Sing 10ppm GO INDIC
Oct20 43.61 / 43.75
Nov20 44.06 / 44.26
Dec20 44.53 / 44.73
Jan21 45.06 / 45.26
Feb21 45.63 / 45.83
Mar21 46.19 / 46.39
Q4-20 44.00 / 44.30
Q1-21 45.58 / 45.88
Q2-21 47.14 / 47.44
Q3-21 48.50 / 48.80
CAL21 47.59 / 47.99
ICE Gasoil 10ppm INDIC
Oct20 323.69 / 325.69
Nov20 330.22 / 332.22
Dec20 335.68 / 337.68
Jan21 341.38 / 343.38
Feb21 346.66 / 348.66
Mar21 350.45 / 352.45
Q4-20 329.85 / 331.85
Q1-21 346.16 / 348.16
Q2-21 356.94 / 358.94
Q3-21 370.23 / 372.23
CAL21 363.10 / 365.10
Rott Hi5 Sing Hi5
Oct20 51 63
Nov20 53 63
Dec20 54 63
Jan21 55 62
Feb21 56 61
Mar21 57 61
Q4-20 53 63
Q1-21 56 61
Q2-21 58 61
Q3-21 62 61
CAL21 60 61