Crude Oil

Oil prices rose for a second straight session on Thursday, as the possibility that OPEC+ producers might decide against increasing output at a key meeting later in the day lent support alongside a drop in U.S. fuel inventories. 

Brent futures settled rose $1.37, or 2.2%, to settle at $64.07. WTI crude settled settled up $1.53, or 2.6%, at $61.28 per barrel.

OPEC+ are considering rolling over production cuts into Apr’21 instead of raising output as a recovery in oil demand remains fragile due to the coronavirus crisis, three OPEC+ sources told Reuters.

ICE is looking to run two types of Dated Brent contracts after Jun’22 following pricing agency Platts’ announced major change to its global oil benchmark, a circular from the exchange showed.

ADNOC will remove all destination restrictions for all its crude grades ahead of launching its Murban futures contract, and has signed initial deals with Rongsheng Petrochemicals and Unipec to explore the use of Murban futures with Chinese end users.

India wants major OPEC+ producers to boost output in order to fulfill their promise of stable crude markets, the nation’s oil minister said on Wednesday.

DOE data

We have a situation where crude stockpiles have shown a massive jump, accompanied by a massive draw in product stocks. We need to examine this in a little more detail to understand a bit more of the anomalous results brought around by the Texan freeze, so to speak. It will help to keep in mind our Material Balance Statement to try and make more sense as well.

The three most important points that people are hammering across are that

1.  Crude Stocks have jumped

2.  Refinery Runs have dropped

3.  Product stocks have plunged

The analysis therefore lends itself to “Refineries will come back to full swing so there is a massive shortfall in supply.

Our thoughts are slightly different. In the first place we would like to point your attention to the fact that, as per our material balance statement, gasoline stocks appear to have dropped only to the extent of 2 million barrels. There is obviously some anomaly here. We would not be surprised to see a correction in stocks going forward.

Secondly, we would like to point our that crude production has increased by 300 Kbpd. As refineries return onstream, so will crude producion. Therefore, any shortfall is likely to be miniscule. In short, we are nowhere as bullish as the market appears to be.

covid 19 

At a global level, the death toll from the COVID-19 virus rose to 2,570,868 (+10,912 DoD) yesterday. The total number of active cases rose by around 80,000 DoD to 21.71 million. (Click here for details)


No fresh news on the naphtha market.

The March crack is lower at $2.05 /bbl


Light Distillate inventories in the Fujairah bunkering and storage hub fell by 952 KB to 7.14 Million barrels, data from S&P Global Platts showed.

The March crack is lower at $7.10 /bbl.

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


Middle Distillate inventories in the Fujairah bunkering and storage hub rose marginally by 56 KB to 4.12 Million barrels, data from S&P Global Platts showed.

The March crack for 500 ppm Gasoil is lower at $5.75 /bbl with the 10 ppm crack at $ 7.05 / bbl. The regrade is at -$ 1.55 /bbl. 

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

Fuel Oil

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack rose on Wednesday, climbing away from a one-month low in the previous session over signs OPEC+ producers may extend production cuts which in turn could curb residual fuel supplies.

The front-month VLSFO crack rose to $14.61 a barrel above Dubai crude oil prices, up from a one-month low of $13.64 in the previous session, according to Refinitiv data on Eikon.

Fuel oil inventories in the Fujairah bunkering and storage hub fell 13% to a two-week low in the week ended March 1, official data showed, reversing a 16% jump in the week before. Inventories  fell by 1.446 million barrels, or about 228,000 tonnes, to 9.572 million barrels, or 1.507 million tonnes, data via S&P Global Platts showed.

The March crack for 180 cst FO is unchanged at  -$3.80 /bbl with the visco spread at $0.80 /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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