Crude Oil

Crude futures continued their downward trend, falling a further 1 percent on Thursday after U.S. data showed gasoline inventories rose unexpectedly last week, overshadowing a bullish drawdown in crude. Brent crude  futures fell 77 cents to settle at $76.50 a barrel. WTI crude  futures fell 95 cents to settle at $67.77 a barrel

US said it would consider waivers for Iranian oil buyers, on the condition that they eventually halt imports. Secretary of State Mike Pompeo said that some buyers may require “a little bit of time” to unwind their trade with Iran. Meanwhile, Bloomberg reported that JXTG, Idemitsu Kosan and BPCL have all skipped Iranian crude purchases for October, ahead of US’s 5 November deadline.

The DOE weekly data reported a drawdown in crude stocks, contrary to what was reported by the API. However, product stocks built significantly somewhat negating the impact of the draw down.

The crude stock draw was reported despite an increase in net imports to the tune of 500 kb/d. While refinery runs did increase marginally, the increase did not seem to be sufficient to warrant this draw as can be seen by the material balance statement below

The build in products came both due to a decrease in net exports of products as well as a drop in demand, which was a bit of a disappointment. Distillate stocks also built due to an increase in production.

Gasoline stocks are at a seasonal high whereas distillate stocks have now climbed back to more comfortable levels although they are still below the 5 year average. Detailed charts on the DOE data can be seen by clicking here


Naphtha extended losses for a second day running in Asia, reaching its lowest in nearly two weeks at $92.75 a tonne on Thursday, pressured by abundant spot naphtha from the Middle East and Egypt.

The September crack is lower at -$ 0.65 /bbl


Asia’s gasoline crack was at a two-session high of $8.30 a barrel. Singapore’s onshore light distillates stocks eased by 130 KB to reach a two-month low of 13 million barrels in the week to Sept. 5.

ENOC continued to be a buyer of gasoline in the Platts window buying two cargoes of the three traded yesterday. To date, it has purchased 7 cargoes for a total of 1.25 million barrels.  

The September crack is higher at $ 9.75 /bbl 

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


Asia’s cash premiums for 10ppm gasoil slipped on Thursday amid weaker deals, while middle distillate inventories in Singapore climbed to their highest in five months.

Cash premiums for 10ppm gasoil  slipped to 44 cents a barrel to Singapore quotes, compared with 54 cents a barrel on Wednesday.

Meanwhile, cash differentials for jet fuel  narrowed their discounts by a cent to be at 36 cents a barrel to Singapore quotes on Thursday.

The current strength in jet margins can be partly attributed to the region’s booming aviation demand which, however, might come under pressure if Asian airlines are forced to raise airfares to mitigate costs from higher jet fuel prices.

Singapore onshore middle distillate stocks rose about 10 percent in the week to Sept. 5 to a five-month high of 11.4 million barrels.

The September crack has fallen to $ 16.10 / bbl with the 10 ppm crack at $ 16.85 /bbl. The regrade is higher at – $ 0.60 /bbl.

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

Fuel Oil

Asia’s fuel oil market weakened on Thursday with 380-cst cash premiums and prompt-month time spreads slipping further to fresh lows as expectations of higher arbitrage flows into Singapore continue to weigh on sentiment.

The 380-cst fuel oil cash premium slipped to $3.31 a tonne to Singapore quotes, its narrowest premium since July 5.  The 380-cst prompt-month time spread was trading at about $3.75 a tonne by Asia close, down from $4 a tonne on Wednesday and its lowest since June 15.  

Onshore inventories of fuel oil dropped to a two-week low of 16.1 million barrels. This was 593 KB lower than last week.

The September180 cst crack however jumped up to -$ 5.25 / bbl with the visco spread at $ 0.80 /bbl.

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

Hedge Recommendations

The Cal-19 Distillate cracks have once again improved but not for us to take any further action.

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 refiner.

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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