Crude Oil

Oil futures were rose on Wednseday after progress on the US stimulus to support the COVID affected would help the market. 

Brent contract for December rose 74 cents to settle at $42.30. WTI crude rose 93 cents to settle at $40.22 per barrel.

The OPEC group pumped 24.38 million bpd on average in September, up 160 kbpd from August’s revised figure and a further boost from the three-decade low reached in June. OPEC oil output has risen for a third month in September, as a restart of some Libyan installations and higher Iranian exports offset strong adherence by other members to an OPEC-led supply cut deal.

Venezuela’s overall oil production rebounded in Sep’20 to average 385 KB/D, a 50 KB/D increase from Aug’20, according to daily production reports produced by state-owned PDVSA and reviewed by S&P Global Platts.

 IOC’s Gujarat refinery’s 85 KB/D capacity expansion project is set to be over by 30 Sep’24, company officials said Wednesay, a delay of one and a half months from the previous deadline.

Japanese business sentiment improved in Q3’20 from a 11-year low hit three months ago, with the headline index for big manufacturers’ sentiment improving to -27 in Sep’20 versus -34 in Jun’20.. 

doe data

The DOE data was mildly bullish showing draw downs in both crude and distillate stocks even as gasoline stocks built. Having said that there were some anomalies in the report which were a bit puzzling.

While refining run rates rose 1% to 75.8%, product of all products actually dropped! This is mildly surprising, to say the least.

There are the usual anomalies between reported stocks and our material balance statement. The discrepancy in crude stocks is particularly large.

covid 19

At a global level, the death toll from the COVID-19 virus rose to 1,018,218 (+6,209 DoD) yesterday. The total number of active cases rose by around 29,000 DoD to 7. 07 million.  (Click here for details).


Asia’s naphtha crack fell for the second day on Wednesday to a three-week low of $82.45 a tonne.

Hurricanes Sally and Beta had recently disrupted refinery throughput in the United States, resulting in more naphtha being needed to make gasoline.

The October crack is steady at $ 2.15 / bbl. 


Asia’s gasoline refining margin was at a one-week low of $4.76 a barrel.

 The October crack is higher at $ 5.05 / bbl

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


Cash discounts for 10 ppm gasoil were unchanged at 53 cents a barrel to Singapore quotes. Refining profit margins, or cracks, for 10 ppm gasoil were at $3.09 a barrel over Dubai crude during Asian trading hours, 70 cents higher than Tuesday.

The Air Transport Action Group (ATAG) predicted that the travel slump and a slow recovery will threaten 4.8 million aviation workers and more than half of the 87.7 million total jobs supported directly or indirectly by the sector.

The October crack for 500 ppm Gasoil is higher at $2.50 /bbl with the 10 ppm crack at $ 3.30 / bbl. The regrade is at   -$ 2.00 /bbl. 

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

Fuel Oil

Asia’s front-month 0.5% VLSFO crack jumped to a two-month high on Wednesday.

The firmer refining margin also came as oil prices fell for a second day on Wednesday as rising coronavirus cases prompted concerns about further restrictions on global economic activity that could curb fuel demand. The VLSFO crack against Dubai crude jumped to $8.63 a barrel, up from $7.40 a barrel on Tuesday.

The October crack for 180 cst FO is higher at – $2.25 /bbl with the visco spread at $0.95 /bbl.

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

Hedge Recommendations

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.

Click Here to see how all our recommendations have fared

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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