Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Crude prices struggled to stay up as additional EU sanctions on Russian energy — something oil bulls had been counting on day after day — isn’t coming yet as the West weighs between adding to the laundry list of actions already taken against Vladimir Putin, versus insulating itself against the global energy crisis.

Brent crude futures settled down 49 cents, or 0.5%, at $100.58 per barrel, after plumbing a session low of $98.50.

WTI crude futures settled down 20 cents, or 0.2%, at $96.03, after an intraday low at $93.86.

Adding to the weight on oil was the worst coronavirus outbreak in Shanghai in two years that has forced a more-than-week long lockdown in China’s second largest city, sparking concerns about demand in the No. 2 oil consuming country.


At a global level, the death toll from the COVID-19 virus rose to 6.19 Million (+3,539 DoD) yesterday. The total number of active cases fell by 80,000 DoD to 58.12 million. (Click here for details).

No fresh news in the Naphtha markets.

The May crack is higher at $ 2.35 per barrel 


Asia’s gasoline crack extended gains on Friday after crude oil prices weakened and a flurry of trades in the Singapore window boosted market sentiment. The refining profit margin for gasoline rose to $14.33 a barrel from $12.83 in the last session.

In another bullish sign, Indian state refiners’ average daily sales of gasoline were 86,850 tonnes last month, 14.2% higher than the pre-pandemic levels of March 2019, preliminary sales data showed.

The May crack is higher at $19.15 per barrel.

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

Asia’s cash premiums for 10 ppm gasoil rose to an over three-week high on Friday, posting a second consecutive weekly gain, lifted by tight global supplies.

Cash differentials for gasoil with 10 ppm sulphur content were at a premium of $7.42 a barrel to Singapore quotes, the highest since March 10. The premiums were at $6.99 per barrel a day earlier, and have risen 19.3% this week.

A recent resurgence in COVID-19 cases in China that has led to reimposed lockdowns, however, would weigh on the region’s near term demand, market watchers said. “However, even if China turns to the export market with the surplus barrels, it may not be able to cool down the market, which is too hot now,” a gasoil trader said.

Refining margins, also known as cracks, for 10 ppm gasoil slipped for a sixth consecutive session to $26.43 a barrel over Dubai crude during Asian trading hours, compared with $29.76 a barrel on Thursday. The cracks, however, are still about 135% higher compared with their five-year seasonal average for this time of the year.

Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp refining and storage hub dropped 3.8% to 1.6 million tonnes in the week ended March 31, according to Dutch consultancy Insights Global. Gasoil stocks dropped to their lowest level since February due to lack of imports, Insights Global’s Lars van Wageningen said, while demand up the Rhine River was lower week-on-week. ARA jet fuel inventories rose 5.9% this week to 958,000 tonnes.

The May crack for 500 ppm Gasoil is lower at $29.30 /bbl with the 10 ppm crack at $30.30 /bbl. The regrade is at -$4.00 /bbl.

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

Asia’s cash premiums for 380-cst high-sulphur fuel oil (HSFO) climbed on Friday, surging to a more than two-year high and posting their second consecutive weekly jump amid strong demand and tight supplies. The cash differentials for 380-cst HSFO surged to a premium of $21.50 per tonne to Singapore quotes, compared with $20.75 per tonne a day earlier.

The premiums have more than doubled this week, while Singapore’s onshore fuel oil stocks dropped to a three-month low of 20.9 million barrels, or 3.1 million tonnes, in the week to March 30.

The cash differentials for 180-cst HSFO rose to $25.86 per tonne to Singapore quotes on Friday, posting a rise of 139% this week.

The front-month barge crack for 380-cst HSFO traded at a discount of $9.50 a barrel to Brent on Friday, compared with minus $12.90 a barrel on Thursday.

The front-month VLSFO crack fell to $22.68 per barrel against Dubai crude during Asian trading hours, compared with $23.41 per barrel in the previous session. Cash premiums for Asia’s 0.5% VLSFO dropped to $20.16 a tonne to Singapore quotes on Friday, down from $22.60 per barrel on Thursday.

The May crack for 180 cst FO is higher at $5.60 /bbl with the visco spread at $5.05 /bbl.

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

We shall hedge another tranche of 180 cst Dubai for May at current levels of $5.60 / bbl respectively. 

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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