Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices fell to a near four-week low on Wednesday, after U.S. crude stocks rose more than expected, as gasoline inventories in the world’s largest oil consumer hit a four-year low.

Brent crude  fell $2.73, or 3.2%, to settle at $81.99 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $3.05, or 3.6%, to settle at $80.86 per barrel.

That was the biggest daily percentage declines for both benchmarks since early August and the lowest closes for Brent since Oct. 7 and WTI since Oct. 13.

The U.S. Federal Reserve, as expected, said it will commence tapering asset purchases this month. Traders said that could sap some speculative buying in risk assets including oil.

api data

The DOE data corroborated the build reported by the API. It seems to be pretty apparent that there is no shortfall of crude in the market as earlier feared. While gasoline stocks are at a 4 year low, these can be replaced by ramping up refinery run rates. We can also see that US crude supply has slowly started increasing again.


The material balance statement suggests that crude stocks may have been unchanged while gasoline stocks built instead of having been drawn. Overall, the picture suggests that there is no shortage of crude in the near future. Equally, it also suggests that OPEC has been right all along in refusing to raise supply.

At a global level, the death toll from the COVID-19 virus rose to 5.04 Million (+7,799 DoD) yesterday. The total number of active cases was rose by 60,000 DoD at 18.34 million. (Click here for details).

Markets closed today

Asia’s naphtha crack eased on Wednesday, but remained near recent multi-year highs as robust demand supported market sentiment.

The crack slipped to $172.50 per tonne from $173.98 in the last session. Naphtha margins have risen nearly 50% in the last two months on the back of firm cracker feedstock demand and increased blending interest due to strength in the gasoline complex.

The November crack is higher at $5.65 / bbl.

Markets closed today


Asia’s gasoline crack eased slightly but remained above $14 per barrel as Singapore inventories fell to a more than two-year low.

The crack fell to $14.30 a barrel from $15.47 in the last session. Gasoline margins have more than doubled since September as consumption has reached pre-pandemic levels in the region amid tight supplies from China.

Inventories in Singapore declined by 1.89 million barrels (nearly 15%) to 10.37 million barrels. This level has not been seen since October 2019. Inventories at Fujairah Oil Industry Zone also declined by 150,000 barrels last week to 4.918 million barrels, according to industry information service S&P Global Platts.

The November crack is higher at $15.35 / bbl.

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

Markets closed today


Cash differentials for gasoil with 10 ppm sulphur content, were at a premium of 79 cents per barrel to Singapore quotes, up from 78 cents per barrel on Monday.

Asian jet fuel refining margins edged higher on Wednesday as raw material crude prices slipped, while traders were hoping year-end travelling demand would boost the aviation fuel market as governments relax border restrictions further in coming days.

Cash differentials for jet fuel fell 9 cents to a premium of 29 cents per barrel over Singapore quotes.

Refining margins or cracks for jet fuel inched up by a cent to $12.36 per barrel over Dubai crude during Asian trading hours.

The November crack for 500 ppm Gasoil is lower at $11.20 /bbl with the 10 ppm crack at $ 12.50 /bbl. The regrade is at -$ 0.30 /bbl. 

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

Markets closed today


Asia’s cash premium for 380-cst high-sulphur fuel oil (HSFO) rose on Wednesday, lifted by a firmer deal in the physical market, while the prompt-month spread for the residual fuel grade widened its backwardation.

The cash premium for 380-cst HSFO was at 28 cents per tonne to Singapore quotes, up from 10 cents per tonne a day earlier.

The Nov/Dec time spread for the 380-cst HSFO in Singapore traded at a premium of 25 cents per tonne on Wednesday.

The 380-cst HSFO barge crack for December dipped to a discount of $14.58 a barrel to Brent, compared with minus $14.39 per barrel on Tuesday, Refinitiv Eikon data showed.

The November crack for 180 cst FO is lower at  -$9.35 /bbl with the visco spread at $1.75 /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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