Oil prices fell on Monday after Saudi Arabia’s sharp cuts to crude contract prices for Asia revived concerns over the demand outlook.
Brent Crude futures fell 39 cents to settle at $72.22 a barrel. U.S. West Texas Intermediate crude futures were last down 40 cents at $68.89 a barrel.
Losses were capped by concerns that U.S. supply would remain limited in the wake of Hurricane Ida. About 1.5 million barrels per day of oil production (80%) in the Gulf of Mexico remain shut in after Hurricane Ida, the Bureau of Safety and Environmental Enforcement said on Monday. The U.S. government is releasing crude from strategic petroleum reserves as production in the U.S. Gulf Coast struggles to recover.
Hedge funds purchased petroleum last week at the second-fastest rate this year after Hurricane Ida disrupted offshore oil wells and onshore refineries in the Gulf of Mexico. Fund managers have become especially bullish about prices for middle distillates such as U.S. diesel and European gas oil, where the ratio of bullish long positions to bearish short ones has climbed to 8.6 to 1.
Data not updated on 6-Sep-21
At a global level, the death toll from the COVID-19 virus rose to 4.58 Million (+6,608 DoD) yesterday. The total number of active cases dropped by 100,000 DoD to 18.92 million. (Click here for details). We hope that this is a sign that the infectiousness has peaked out and we will soon see returns to significantly lower levels.
Asia’s naphtha crack gained steam for a second straight session as crude oil prices eased after Saudi Arabia slashed October prices for Asia by at least $1 a barrel.
The crack climbed to $129.73 a tonne from $125.35 on Friday, while the prompt inter-month spread widened in backwardation to $6 per tonne.
The September crack is higher at $4.35 / bbl.
The October crack is at $4.00 / bbl.
Asia’s gasoline crack rose on Monday for a second consecutive session on expectations of firm demand from India.
The crack edged higher to $7.68 a barrel from $7.28 on Friday.
India’s gasoline demand is likely to hit a record this fiscal year. The expected rise in import could boost refiners’ margins for the fuel in the region.
The September crack is higher at $10.05 / bbl.
The September crack is at $9.60 / bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s cash premiums for 10 ppm gasoil rose for a fourth consecutive session on Friday, soaring to their highest level in over a year, buoyed by active buying interests in the physical market and strong arbitrage demand from Europe.
Cash differentials for gasoil with 10 ppm sulphur dipped 6 cents to a premium of 25 cents per barrel to Singapore quotes.
Asian refining margins for 10 ppm gasoil held near their strongest level in more than 17 months, supported by weaker raw material crude prices and steady arbitrage flows to the West.
Refining profit margins for 10 ppm gasoil for 10 ppm gasoil were at $9.80 per barrel over Dubai crude during Asian trading hours, compared with Friday’s $9.81 per barrel, the highest since late-March last year.
Cash differentials for jet fuel rose by a cent to a discount of 25 cents per barrel to Singapore quotes on Monday.
The September crack for 500 ppm Gasoil is lower at $8.15 /bbl with the 10 ppm crack at $ 9.65 /bbl. The regrade is at -$ 1.50 /bbl.
The October crack for 500 ppm Gasoil is at $8.30 /bbl with the 10 ppm crack at $ 9.80 /bbl. The regrade is at -$ 1.15 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s 180-cst high-sulphur fuel oil (HSFO) market kicked off the week higher on Monday, extending recent gains as firm demand and tightening supply continue to fuel bullish sentiment.
The 180-0cst HSFO cash premium climbed to a one-week high of $14.13 a tonne to Singapore quotes while the prompt month time spread rose to $18.50 a tonne, its highest since Jan. 29, Refinitiv data in Eikon showed.
The September crack for 180 cst FO is higher at -$1.15 /bbl with the visco spread at $2.00 /bbl.
The October crack for 180 cst FO is at -$3.40 /bbl with the visco spread at $1.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh trades for today. We shall consider 4Q Nap-Dubai over $ 4.00 / bbl
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.