Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose about 3% on Monday, as OPEC+ members agreed to a small production cut of 100,000 barrels per day to bolster prices.

Brent futures settled $2.72 higher at $95.74 a barrel, a 2.92% gain.

WTI rose $2 to $88.85 per barrel, a 2.3% rise after a 0.3% gain in the previous session, in thin volumes during the U.S. Labor Day holiday.

The 100,000 barrels per day reduction by the OPEC+ group, amounts to only 0.1% of global demand. The group also agreed they could meet any time to adjust production before the next scheduled meeting on Oct. 5.

Lockdown measures in China’s southern technology hub of Shenzhen eased on Monday as new infections showed signs of stabilizing though the city remains on high vigilance.

Meanwhile, talks to revive the West’s 2015 nuclear deal with Iran, potentially providing a supply boost from Iranian crude’s returning to the market, have hit a new snag. The White House on Friday rejected Iran’s call for a deal to be linked with closure of investigations by the U.N. nuclear watchdog, a Western diplomat said.

Asia’s naphtha crack dipped to a discount of $50.90 a tonne from $42.70 a tonne after crude oil benchmarks strengthened.

The September crack is lower at -$ -20.40 per barrel 

Asia’s refining profit margin for gasoline inched higher on Monday as markets tightened amid reduced exports from top suppliers in the region.

The crack rose to $4.79 a barrel from $3.34 a barrel on Friday. The gasoline margin weakened by nearly 61% last week after Indonesia, Asia’s biggest gasoline importer, deferred some of its gasoline deliveries for September, market sources said.

On the supply side, net gasoline exports in August from Singapore and neighbouring ports in Malaysia, China, India, Japan, South Korea and Taiwan dropped to 2.4 million tonnes, from July’s 3.8- 3.9 million tonnes, assessments by Refinitiv Oil Research showed.

The September crack is higher at $3.65 per barrel.

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

Asia’s refining margins for gasoil with 10 ppm sulphur content rose on Monday as worries over weak demand in top consumer China softened after some lockdown measures were eased and greater policy support for the economy was announced.

Cash differentials for 10 ppm gasoil stood at a premium of $1.68 a barrel to Singapore quotesdown from $1.77 in the previous session.

Refining margins for 10 ppm gasoil rose to $47.86 a barrel over Dubai crude in Asian trading hours, compared with $44.30 on Friday.

Cash differentials for jet spiked to a premium of $3.66 a barrel to Singapore quotes, from a premium of $2.39 a barrel in the previous session.

Refining margins for jet rose to $41.36 a barrel over Dubai crude during Asian trading hours, compared with $37.95 on Friday.

The September crack for 500 ppm Gasoil is lower at $43.65 /bbl with the 10 ppm crack $48.65 /bbl. The 10 ppm regrade is at -$7.60 /bbl.

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

The 380-cst high sulphur fuel oil market firmed on Monday as the new trading week kicked off with a flurry of spot trades.

Reflecting active spot uptake, the 380-cst HSFO cash differential inched 73 cents higher to a premium of $3.00 per tonne over Singapore quotes.

In contrast, the VLSFO market remained under downward pressure as bearish fundamentals extended into September.

The cash differential for 0.5% very low sulphur fuel oil edged lower to nearly parity over Singapore quotes, sliding by 72 cents day-on-day to a premium of 6 cents per tonne on Monday.

The September crack for 180 cst FO is lower at – $23.85 /bbl with the visco spread at $4.75 /bbl.

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

No fresh trades for 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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