Crude Oil

Oil prices rose to their highest since early March on Wednesday after U.S. crude inventories fell sharply and the dollar weakened.

Brent crude settled 74 cents higher at $45.17 per barrel, while WTI rose 49 cents to $42.19 a barrel.

Rising prices come against the backdrop of a surge in coronavirus cases which could threaten a recovery in fuel demand. Global coronavirus deaths surpassed 700,000 on Wednesday, with the United States, Brazil, India and Mexico leading the rise in fatalities.

China’s INE said it approved an additional 400,000m3 (~2.5 MB) of storage for Sinopec’s crude oil storage capacity as delivery tanks for crude oil futures. The capacity will be increased from the existing 400,000mat Sinopec’s delivery warehouse.

A US appeals court on Wednesday said the 570 KB/D Dakota Access Pipeline (DAPL) does not have to be shut and drained per a lower court order, but a legal battle continued over the permit that allowed the line to be finished.

doe data

In the U.S., crude inventories fell by 7.4 million barrels last week while distillate inventories rose last week to their highest in 38 years for the third week in a row. Refining rates climbed marginally to 79.6%. The anomalies shown in the material balance statement are huge with crude stocks apparently having built by 7.7 million barrels as opposed to a reported equivalent draw.

A significant rise in crude imports coupled with a drop in exports explain this rise in crude. The draw reported is a bit puzzling in this context. Equally at odds is the reported build in gasoline with the material balance suggesting a significant draw.

covid 19

At a global level, the death toll from the COVID-19 virus rose to 710,287 (+6,838 DoD) yesterday, with the total number of confirmed infections at 18,965,479 (+271,406 DoD).  (Click here for details).


Asia’s naphtha crack on the other hand fell to a two-session low of $58.13 a tonne on Tuesday.   

The August crack is higher at $ -0.60 /bbl. The September crack is at -$0.80 /bbl. 


Asia’s gasoline margin returned to positive territory on Wednesday after flipping into a discount to Brent for the first time since June on Monday. Asia’s gasoline margin was at a premium of 74 cents a barrel to Brent compared to a small discount of 2 cents in the previous session. 

The August crack has risen further to $1.90 /bbl. The September crack is at $1.75 / bbl.

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


Asia’s cash premiums for 10ppm gasoil lingered near their lowest levels in more than two months on Wednesday, while the prompt-month spread for the industrial fuel grade in Singapore deepened its contango structure.

Cash premiums for gasoil with 10 ppm sulphur content remained unchanged at 9 cents a barrel to Singapore quotes on Wednesday.

The August/September time spread for 10 ppm gasoil, which flipped to a contango structure on Tuesday, traded at a discount of 25 cents a barrel, compared with minus 9 cents per barrel a day earlier.

The August crack for 500 ppm Gasoil is lower at $4.95 /bbl with the 10 ppm crack at $ 6.15 / bbl. The regrade is at   -$ 3.80 /bbl.

The September crack for 500 ppm Gasoil is at $5.30 /bbl with the 10 ppm crack at $ 6.10 / bbl. The regrade is at   -$ 3.85 /bbl.

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

Fuel Oil

Discounts for delivered VLSFO bunkers were at about $32 per tonne against Singapore 10ppm quotes on Wednesday, up from a discount of about $33 per tonne in the previous session but lower than the $28 per tonne discount last week when spot demand had jumped.

At the start of July, weak demand and rising supplies pushed the delivered bunker discount to record lows of around $45-$46 a tonne..

The August crack for 180 cst FO is higher at – $2.75 /bbl with the visco spread at $0.80 /bbl.

The September crack for 180 cst FO is at – $3.05 /bbl with the visco spread at $0.75 /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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