Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose by about 1% on Tuesday, recovering about a quarter of what they lost in the previous session, as the trade awaited the release of weekly inventory data on U.S. petroleum supply-demand. 

Brent crude settled up 59 cents, or 1%, at $62.74 per barrel. It had lost 4.2% in the previous session. WTI settled up 68 cents, or 1.2%, at $59.33 per barrel.

Strong economic data from China and the US helped lift oil prices by 1% on Tuesday, recouping some of the previous session’s steep losses.

Iran and world powers held what they described as “constructive” talks on Tuesday and agreed to form working groups to discuss the sanctions Washington might lift and the nuclear curbs Tehran might observe as they try to revive the 2015 nuclear deal.

US crude oil production is expected to fall by 270 KB/D in 2021 to 11.04 MMB/D, the US EIA said on Tuesday, a steeper decline than its previous forecast for a drop of 160 KB/D.

PDVSA managed to ship more crude and fuel in Mar’21 directly to China, averaging 248 KB/D out of its total exports of 690 KB/D, even as overall shipments dipped modestly last month, according to Refinitiv Eikon data.

Hedge funds were small buyers of petroleum last week as managers repurchased some short positions after heavy selling and price falls the previous week, purchasing the equivalent of 10 MMB in the week to 30 Mar’21.

api data 

The draw in Crude stocks was more than offset by the build in product stocks suggesting that the demand scenario continues to lack robustness. We await official data today.

At a global level, the death toll from the COVID-19 virus rose to 2,885,302 (+11,802 DoD) yesterday. The total number of active cases fell by around 30,000 DoD to 22.87 million. (Click here for details)

Asia’s naphtha crack fell to $99.73 a tonne from $101.25 a tonne on Monday.

The April crack is lower at $1.15 /bbl. The May crack is at $ 1.40 /bbl

Asia’s gasoline crack registered a sixth straight session of gains on signs of improving demand and regional refinery outages.

The gasoline crack edged up to $7.21 a barrel from $7.20 on Monday.

US gasoline consumption is expected to rise 7.5% YoY in 2021 to average 8.6 MMB/D as driving activity climbs amid a recovering labor market and increased vaccine access, the US EIA said in its monthly Short-Term Energy Outlook.

The April crack is lower at $8.45 /bbl. The May crack is at $8.70 /bbl

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

Cash discounts for 10 ppm gasoil narrowed sharply to 9 cents per barrel to Singapore quotes.

Cash discounts for jet fuel were at 61 cents per barrel to Singapore quotes on Tuesday, compared with a discount of 62 cents per barrel on Monday.

Global scheduled airline capacity has increased 1.8% WoW to 63.2 million seats in the week starting 5 Apr’21, 59.3% of Jan’20 levels, driven by gains in South and Southeast Asia, according to OAG. Scheduled seat capacity for global airlines was 27% higher in March compared with February, with aviation markets including Australia and China contributing to the growth, according to aviation data firm OAG.

The April crack for 500 ppm Gasoil is lower at $4.80 /bbl with the 10 ppm crack at $ 5.85 /bbl. The regrade is at -$ 1.50 /bbl. 

The May crack for 500 ppm Gasoil is at $5.50 /bbl with the 10 ppm crack at $ 6.55 /bbl. The regrade is at -$ 1.40 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) refining margin and prompt-month time spread extended gains amid limited trade on Tuesday, after hitting multi-month lows in the previous week.

The prompt-month VLSFO crack was at $12.14 a barrel above Dubai crude prices on Tuesday, up from a near three-month low of $11.20 a barrel on Wednesday, data from Refinitiv Eikon showed.

Similarly, the prompt-month time spread rose to a premium of 50 cents a tonne on Tuesday, up from parity in the previous session, the Refinitiv data showed.

The April crack for 180 cst FO is lower at  -$4.45 /bbl with the visco spread at $1.15 /bbl.

The May crack for 180 cst FO is at  -$4.05 /bbl with the visco spread at $1.05 /bbl.

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

No fresh action today. Should the Jap. Nap – Dubai crack rise above $ 2.00 per bbl, we will lay on a hedge.

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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