Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil futures were little changed on Thursday as reports China was prepared to buy more oil and other energy supplies to meet growing demand offset price pressure from an unexpected rise in U.S. crude inventories and a strong dollar.

Brent crude for November delivery fell 12 cents, or 0.2%, to settle at $78.52 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 20 cents, or 0.3%, to settle at $75.03. Earlier in the day prices at both benchmarks dropped over $1 a barrel.

OPEC+ is considering going beyond its existing deal to boost production by 400,000 barrels per day (bpd) when it meets next week, sources said, at a time when oil prices are near a three-year high and consumers are pressing for more supply.

China Premier Li Keqiang said the world’s biggest crude importer and No.2 consumer will ensure its energy, power supply and will keep economic operations within a reasonable range. China’s factory activity unexpectedly shrank in September due to wider curbs on electricity use and elevated input prices.

British petrol stations are still seeing unprecedented demand with more than a quarter of pumps still dry as the fuel crisis cut road traffic volumes to the lowest level since the COVID-19 lockdowns ended two months ago.

At a global level, the death toll from the COVID-19 virus rose to 4.80 Million (+7,815 DoD) yesterday. The total number of active cases was marginally higher DoD at 18.39 million. (Click here for details).

Asia’s naphtha crack strengthened after Singapore inventories plunged to their lowest level in eleven months.

The refining margin rose to $132.33 a tonne from $130.68 on the previous day. However, the prompt, inter-month spread narrowed 50 cents in backwardation.

The October crack is lower at $3.65 / bbl.

Asia’s gasoline crack strengthened on Thursday after Singapore inventories plunged to their lowest level in eleven months.

The crack rose to $7.40 a barrel from $6.42 in the previous session.

Light Distillate stocks in Singapore dropped by 1.21 million barrels (nearly 10%) to 11.85 million barrels, data released by Enterprise, Singapore showed.

The October crack is unchanged at $9.90 / bbl.


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

Cash differentials for gasoil with 10 ppm sulphur dipped 8 cents to 45 cents per barrel to Singapore quotes on Thursday.

Asia’s jet fuel cash differentials flipped back to a narrow discount on Tuesday amid muted buying interests in the physical market, while near-term outlook for the aviation fuel remained clouded as airlines continued to trim capacity for the remainder of the year.

Singapore’s middle distillate inventories dropped 3.1% to 10.5 million barrels in the week to Sept. 29, according to Enterprise Singapore data.

Asia’s cash differentials for jet fuel were at a discount of 5 cents per barrel to Singapore quotes on Thursday, compared with a premium of 7 cents per barrel a day earlier.

Asian refining margins for jet fuel rose for a second straight session on Thursday, clinching their strongest level in more than 18 months, buoyed by an uptick in aviation demand in some western markets.

Refining margins or cracks for jet fuel climbed to $10.16 per barrel over Dubai crude during Asian trading hours, a level not seen March 11 last year. They were at $9.54 per barrel on Wednesday.

The October crack for 500 ppm Gasoil is higher at $11.00 /bbl with the 10 ppm crack at $ 13.00 /bbl. The regrade is at -$ 0.70 /bbl. 

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

The front-month 10ppm gasoil spread to 0.5% very low-sulphur fuel oil (VLSFO) hit a 1-1/2 year high of $1.09 a barrel on Thursday, fuelled by a strengthening gasoil market.

VLSFO cash premiums dropped to a more than one-month low of $1.78 a tonne to Singapore quotes as lower supplier offers weighed on the cash differential.

Singapore’s fuel oil stocks fell by 2.73 million barrels, or about 429,000 tonnes, to 18.73 million barrels, or 2.95 million tonnes, according to Enterprise Singapore data. The residual fuel stocks were 22% lower from year-ago levels and below the 2021 weekly average of 22.89 million barrels.

The October crack for 180 cst FO is lower at  -$1.05 /bbl with the visco spread at $2.45 /bbl.

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

No fresh trades 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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