Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Crude prices tanked for a second day in a row, falling as much as 2% to extend the near 4% drop in the previous session, on worries that more countries that are members or allies to the Organization of the Petroleum Exporting Countries will overproduce after Saudi Arabia and the UAE — who dominate the cartel — failed to agree on August export quotas.

Brent Crude settled down $1.10, or 1.5%, at $73.43 per barrel.  Brent lost 3.4% in the previous session.

WTI crude futures settled down $1.17, or 1.6%, at $72.20 a barrel. WTI lost 3.8% on Tuesday for its sharpest one-day loss in three weeks. 

Russia is leading efforts to close divisions between Saudi Arabia and the UAE to help strike a deal to raise oil output in coming months, OPEC+ sources said, with OPEC and its allies yet to set a date for their next oil policy meeting.

The Saudis had proposed that OPEC+ raise output in stages to a net of 2 million barrels daily between August and December. They also suggested extending withholding the full production capacity of all OPEC+ members till the end of next year instead of April 2022, without an adjustment to baseline production levels. The UAE, however, was unhappy about the baseline from which their production cuts were calculated, arguing that the level, set at the height of last year’s pandemic, was too low. Abu Dhabi has invested billions of dollars since to increase its production capacity and wants to pump more to make good on that money.

US crude oil production is expected to fall by 210 KB/D in 2021 to 11.10 MMB/D, the US EIA said on Wednesday, a smaller decline than its previous forecast for a drop of 230 KB/D.

Tropical Storm Elsa was weakening as it passed over northern Florida on Wednesday afternoon, the US NHC said, apparently sparing the state from some of the serious harm authorities had braced for.


At a global level, the death toll from the COVID-19 virus rose to 4.02 Million (+8,269 DoD) yesterday. The total number of active cases shot up by 90,000 DoD to 11.73 million. (Click here for details).

The WHO emergencies head urged countries on Wednesday to use extreme caution when lifting COVID-19 restrictions so as “not to lose the gains you’ve made”.

Asia’s naphtha crack slipped on Wednesday, ending six straight sessions of gains that propelled the refining margins to multi-month highs on Tuesday.

The naphtha crack fell to $122.60 a tonne on Wednesday, down from $130.88 a tonne in the previous session, the highest since December 2017.

The July crack is higher at $2.30 / bbl

The August crack is at $2.70 / bbl

Asia’s gasoline crack also fell to $8.83 a barrel, down from a 17-month high of $9.35 a barrel on Tuesday.

Light distillates stocks held in Fujairah fell 11%, or 791,000 barrels, to a two-week low of 6.47 million barrels in the week ended July 5, data via S&P Global Platts showed. Compared with the same time last year, Fujairah light distillate inventories were 11% lower.

The July crack is lower at 10.55 / bbl

The August crack is at 10.95 / bbl

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

Cash differentials for 10 ppm gasoil were 2 cents higher at discount of 13 cents per barrel to Singapore quotes on Monday.

Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 7.3% to 3.7 million barrels in the week ended July 5, data via S&P Global Platts showed. The weekly stocks in Fujairah have averaged 3.9 million barrels this year, compared with 4.2 million barrels in 2020, Reuters calculations showed.

Cash differentials for jet fuel widened by 2 cents to 45 cents per barrel to Singapore quotes on Wednesday, while the July/August time spread traded at minus 43 cents per barrel on Wednesday.

Vietnam halted dozens of flights in and out of Ho Chi Minh City on Tuesday after reporting more than 1,000 new cases for a second day, while South Korea is considering pushing curbs back up to the highest level after the country reported its second-highest daily tally of new COVID-19 cases on Wednesday.

Global airline industry body IATA said that passenger air travel demand remained subdued compared to pre-pandemic levels, with figures showing it was 63% lower in May’21 than May’19.

The July crack for 500 ppm Gasoil is higher at $5.30 /bbl with the 10 ppm crack at $7.30 /bbl. The regrade is at -$ 0.65 /bbl. 

The August crack for 500 ppm Gasoil is at $6.55 /bbl with the 10 ppm crack at $ 8.55 /bbl. The regrade is at -$ 0.25 /bbl. 

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

Stocks of heavy residues in Fujairah fell by 810,000 barrels or 6.8% on the week to 11.051 million barrels. In the bunker market in Fujairah there was a retraction of activity following a few consecutive trading days of robust activity, market sources said. Demand for high sulfur fuel oil in the region was seen from Pakistan.

The July crack for 180 cst FO is higher at  -$7.00 /bbl with the visco spread at $1.50 /bbl.

The August crack for 180 cst FO is at  -$6.35 /bbl with the visco spread at $1.20 /bbl.

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

No fresh trades 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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