**Correction to Morning Oil Report on 05/10/2020 from Ship and Bunker: Bunker demand may fall 5-7% on the year, not Bunker prices as previously stated**
WTI crude oil futures fell 81 cents, or 2%, to $39.86 a barrel by 0411 GMT while Brent crude futures fell by 70 cents, or 1.6%, to $41.95 a barrel.
Brent and Gasoil had a strong day yesterday on supply beckons with falling Norwegian output and a Trump recovery. HSFO prices were up around $4 since yesterday open, with VLSFO prices up around $6. Fuel spreads are a lot more balanced compared to yesterday’s opening, but again volumes are depressed due to the Chinese Holiday which ends tomorrow.
Chrysaor has agreed a reverse takeover of Premier Oil that will create the largest independent oil and gas group in the industry. Creditors in the struggling Premier Oil will take the second largest stake, after Chrysaor who will own 77%, and the Premier shareholders will own less than 6%. Harbour Energy has already turned Chrysaor into the largest oil and gas producer in the North Sea after recent acquisitions of Shell and ConocoPhillips assets. (FT)
Nigeria’s State owned NNPC has extended its 2019-2020 crude-for-swaps agreement by 6 months which includes deals with Vitol, BP, Total and Gunvor whereby the companies receive crude in return for refined products. Nigeria relies on imports to meet its product demand, including 350,000 bpd of gasoline and 90,000 bpd of diesel consumed per day according to government figures. The MD of the NNPC has stated that they have saved $1 billion since the start of the programme, but it has been criticised since the government removed subsidies and relies on a market based pricing system, causing fluctuating prices. (Argus Media)
In main news, the Norwegian oil strikes are set to expand from the 10th October unless negotiations surrounding wages can progress over workers’ pay. The increasing effect of the strike would affect an additional four oil fields on the Norwegian shelf but it is too early to say the effect on output. The conflict offered stability for oil prices after 2 straight days of builds overnight. (Reuters)
INDEX: (MTD Estimates)
* Sing 380: 236.72
* Rott 3.5%: 221.50
* Sing 0.5%: 314.22
* Rott 0.5%: 292.19
HURRICANE DELTA:
* Hurricane Delta Targets Cancun With Extreme Category 4 Winds
* U.S. Gulf Shuts 29% of Oil Output Before Hurricane Delta :BSEE
* BHP Shutting 2 U.S. Gulf Oil Production Platforms Due to Storm
* Enbridge to Evacuate Ship Shoal 207 Gas Platform Ahead of Delta
* Shell Preparing to Shut Several Production Assets in U.S. Gulf
MARKETS NEWS:
* Saudi Arab Extra Light Oil Spread Vs Arab Heavy Narrows for Nov.
* API Reports U.S. Crude Stockpiles Rose 951K Bbl Last Week
* Brazil’s Car Fuel Demand Rose for a Fourth Month in August
* China is Top U.S. Crude Buyer for Fourth Month: Census Bureau
* Oil Tanker Leaves Vancouver Signaling Dalian in China
* Norwegian Oil field strikes set to continue past 10th Oct
OTHER NEWS:
* U.S. Economy’s Recovery Gets Harder as Trump Halts Aid Talks
* Exxon, Oil Rivals Shield Their Carbon Forecasts From Investors
* Utex to File Bankruptcy After Weak Oil Demand Brings Woes
* Companies to Shrink Offices as Remote Work Becomes ‘New Normal’
* Keeping Warm While Working From Home Is About to Get More Costly
ECONOMIC EVENTS: (Times are London.)
* 3:30pm: EIA weekly oil inventory report
* Genscape weekly ARA crude inventory report
Singapore 380 INDIC
Nov20 243.75 / 245.75
Dec20 244.75 / 246.75
Jan21 246.25 / 248.25
Feb21 248.00 / 250.00
Mar21 249.75 / 251.75
Apr21 251.50 / 253.50
Q1-21 248.00 / 250.00
Q2-21 253.00 / 255.00
Q3-21 257.75 / 259.75
Q4-21 260.25 / 263.25
CAL21 252.75 / 258.75
Rotterdam 3.5% INDIC
Nov20 229.50 / 231.50
Dec20 230.00 / 232.00
Jan21 231.75 / 233.75
Feb21 233.25 / 235.25
Mar21 235.00 / 237.00
Apr21 236.75 / 238.75
Q1-21 233.25 / 235.25
Q2-21 238.25 / 240.25
Q3-21 241.50 / 243.50
Q4-21 242.75 / 245.75
CAL21 237.00 / 243.00
Singapore VLSFO 0.5% INDIC
Nov20 319.00 / 324.00
Dec20 318.25 / 323.25
Jan21 318.25 / 323.25
Feb21 319.00 / 324.00
Mar21 320.00 / 325.00
Apr21 321.25 / 326.25
Q1-21 319.25 / 324.25
Q2-21 322.75 / 327.75
Q3-21 326.25 / 332.25
Q4-21 330.00 / 336.00
CAL21 324.25 / 330.25
Rott VLSFO 0.5% INDIC
Nov20 298.25 / 303.25
Dec20 298.50 / 303.50
Jan21 299.25 / 304.25
Feb21 300.25 / 305.25
Mar21 301.50 / 306.50
Apr21 302.75 / 307.75
Q1-21 300.50 / 305.50
Q2-21 304.25 / 309.25
Q3-21 308.25 / 314.25
Q4-21 311.75 / 317.75
CAL21 306.00 / 312.00
Sing 10ppm GO INDIC
Nov20 46.25 / 46.39
Dec20 46.60 / 46.80
Jan21 46.97 / 47.17
Feb21 47.36 / 47.56
Mar21 47.78 / 47.98
Apr21 48.21 / 48.41
Q1-21 47.30 / 47.60
Q2-21 48.57 / 48.87
Q3-21 49.86 / 50.16
Q4-21 50.62 / 50.92
CAL21 49.04 / 49.44
ICE Gasoil 10ppm INDIC
Nov20 345.34 / 347.34
Dec20 349.01 / 351.01
Jan21 353.48 / 355.48
Feb21 357.71 / 359.71
Mar21 360.98 / 362.98
Apr21 364.58 / 366.58
Q1-21 357.40 / 359.40
Q2-21 366.69 / 368.69
Q3-21 378.38 / 380.38
Q4-21 384.71 / 386.71
CAL21 371.79 / 373.79
Rott Hi5 Sing Hi5
Nov20 70 77
Dec20 70 75
Jan21 69 74
Feb21 69 73
Mar21 68 72
Apr21 68 71
Q1-21 69 73
Q2-21 68 71
Q3-21 69 71
Q4-21 71 71
CAL21 69 72