Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose on Tuesday, with Brent topping $70, as optimism grew over the fuel demand outlook during the summer driving season of the United States, the world’s top oil consumer.

Brent crude futures for August gained 83 cents, or 1.2%, to $70.15 a barrel by 0223 GMT. WTIntermediate crude for July was at $67.61 a barrel, up $1.29, or nearly 2% from Friday’s close, with no settlement price for Monday due to a U.S. public holiday.

Iran’s oil output can easily reach 6.5 million barrels per day (bpd) when U.S. sanctions are lifted, Iranian Oil Minister Bijan Zanganeh said on Monday, according to the Ministry’s SHANA website..


At a global level, the death toll from the COVID-19 virus rose to 3.56 Million (+7,886 DoD) yesterday. The total number of active cases rose fell by around 180,000 DoD to 13.99 million. (Click here for details).

China has reported a sudden surge in infections in the country’s southern city of Guangzhou, while Vietnam’s business hub Ho Chi Minh City will begin social distancing measures for 15 days starting Monday.

Asia’s naphtha crack stayed firm on Monday, rising for a second straight session to $104.50 per tonne, compared with $102.60 per tonne in the previous session.

The June crack is higher at $ 0.60 /bbl

Asia’s gasoline crack fell on Monday to its lowest level since May 17 as a sharp rise in coronavirus cases in parts of Southeast Asia triggered fresh mobility restrictions.

The gasoline crack dropped to $4.75 per barrel from $6.28 per barrel in the previous session.

The June crack is lower at $7.75 /bbl

Click Here for a graphical depiction of Global Gasoline stocks by region.

Asian refining margins for 10 ppm gasoil on Monday plunged to their weakest level in three weeks, as renewed lockdown measures to contain surging COVID-19 infections in several markets dented regional demand for the industrial and transportation fuel.

Cash differentials for gasoil with 10 ppm sulphur content were at a narrow premium of 3 cents per barrel to Singapore quotes, while its front-month spread stayed in a backwardated structure to trade at 9 cents per barrel on Monday.

The exchange of futures for swaps (EFS), which determines the gasoil price spread between Singapore and Northwest Europe for July, traded around minus $21 a tonne on Monday – a level that typically makes it profitable for arbitrage shipments.

Cash differentials for jet dropped 2 cents to a discount of 26 cents to Singapore quotes on Monday.

The June crack for 500 ppm Gasoil is unchanged at $6.05 /bbl with the 10 ppm crack at $ 7.85 /bbl. The regrade is at -$ 0.80 /bbl. 

Click Here for a graphical depiction of Global Distillate stocks by region.

 Asia’s 0.5% very low-sulphur fuel oil (VLSFO) cash discount narrowed on Monday amid firmer bids submitted in the Singapore window.

Firmer bids by Mercuria helped lift the VLSFO cash discount to minus $2.69 a tonne to Singapore quotes on Monday, up by 6 cents from the previous session and further away from a nine-month low of minus $3 a tonne on May 25.

Despite a persistent absence of deal activity in the Singapore window, the VLSFO cash discount also narrowed to minus $2.75 a tonne to Singapore quotes on Friday after hitting a near nine-month low earlier in the week and down minus $2.91 on Monday..

Fuel oil stocks in the ARA refining and storage rose by 6,000 tonnes to 1.22 million tonnes in the week ended May 27, data from Dutch consultancy Insights Global (IG) showed.

The June crack for 180 cst FO is higher at  -$6.55 /bbl with the visco spread at $0.95 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

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.

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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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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