Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil had its best week in five on Friday after outsized U.S. draws in everything, from crude to gasoline and diesel, helped bulls put the market back on a positive track.

Brent Crude futures settled up 31 cents, or 0.4%, at $75.41 per barrel on the day. For the week, Brent rose 1.8%. That was its best in six weeks. For July, Brent showed a 1.1% gain.

WTI settled up 33 cents, or 0.5%, at $73.95 per barrel on Friday. The benchmark for U.S. oil was up 2.1% for the Monday-Friday stretch, marking its best week in five. It also showed a gain of 0.7% for July.

While investor risk appetite in oil has grown in recent days, allowing bulls to regain control of the market, the emergence of new Covid threats in the U.S. and elsewhere make the path forward more challenging compared with earlier in the year when crude prices rose almost without stop week after week.

The U.S. oil rig count, an early indicator of future output, fell by 2 to 385 in the week to July 30, according to data on Friday from energy services firm Baker Hughes Co .

At a global level, the death toll from the COVID-19 virus rose to 4.24 Million (+7,348 DoD) yesterday. The total number of active cases rose by 110,000 DoD to 15.14 million. (Click here for details).

The daily death toll has crossed the 10,000 mark for the first time since June 10. This is a worrisome indicator


Asia’s naphtha crack dipped on Friday, moving away from a more than five-and-a-half-year high, after data this week showed stockpiles in Singapore and northwest Europe climbed, easing concerns of tight supplies amid strong demand.

Asia’s naphtha crack slipped to $138.90 a tonne on Friday, down from $142.60 a tonne on Thursday.

The naphtha crack has rallied in July amid firm Asian demand and tightening global supplies even as overall Asia-bound western supplies for August arrival are expected to be above the monthly average of 2 million tonnes.

The August crack is lower at $3.35 / bbl

Asia’s gasoline crack recouped most of the previous session’s losses, as recovering demand in the United States and Europe outweighed a slower recovery in Asia, where spreading coronavirus infections tempered expectations of a rebound in demand.

Asia’s gasoline crack  climbed to $8.78 a barrel on Friday, up from $8.45 in the previous session but slightly below $8.94 posted at the start of the week.

ARA gasoline stocks fell to a more than one-and-a-half year low of 795,000 tonnes, down 9% from the previous week and 43% lower from last year, data from the Dutch consultancy, Insights Global, showed. Gasoline inventories were at their lowest level since December 2019 due to strong exports to the United States, said Insights Global’s Lars van Wageningen.

The August crack is higher at $11.20 / bbl

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

Cash differentials for gasoil with 10 ppm sulphur content were a cent lower at a premium of 4 cents per barrel on Friday.

Asia’s gasoil crack  dipped 3 cents to $7.69 per barrel over Dubai crude during Asian trade on Friday, but traders expect further downside would be limited due to tighter regional supplies.

Gasoil stocks held independently in ARA slipped 0.8% to 2.1 million tonnes in the week ended July 29, data from Dutch consultancy Insights Global showed.

Cash differentials for jet fuel  were at a discount of 16 cents per barrel to Singapore quotes, while the front-month time spread for the aviation fuel remained in a contango structure to trade at minus 4 cents per barrel on Friday.

Asia’s cash discounts for jet fuel widened on Wednesday amid muted buying interests in the physical market, while airlines continued to trim their scheduled capacity for the coming months.

The Jet crack inched up by a cent to $5.49 per barrel over Dubai crude during Asian trading hours. The cracks, however, have shed 5.3% this week, the steepest weekly drop since June 18.

The August crack for 500 ppm Gasoil is lower at $6.45 /bbl with the 10 ppm crack at $ 7.75 /bbl. The regrade is at -$ 0.85 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) market complex was largely steady on the final trading day of July but ended the week slightly higher amid a tighter supply outlook until at least the second-half of August, trade sources said.

Fuel oil stocks in the ARA refining and storage rose by 47,000 tonnes to 1.07 million tonnes in the week ended July 29, data from Dutch consultancy Insights Global showed. Compared with last year, however, the inventories at the ARA hub were 26% higher and below the five-year seasonal average of 1.21 million tonnes

The August crack for 180 cst FO is higher at  -$5.90 /bbl with the visco spread at $1.45 /bbl.

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

No fresh action today. We shall hedge the September gasoline crack above $11.00 / bbl.

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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