Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices fell on Tuesday, pressured by a strong U.S. dollar and concerns about weak demand in the United States and Asia, although ongoing production outages on the U.S. Gulf Coast capped losses.

Brent Crude futures settled down 53 cents, or 0.7%, a $71.69 a barrel, after falling 39 cents on Monday.

U.S. West Texas Intermediate crude futures settled down 94 cents or 1.4% from Friday’s close at $68.35 a barrel, and touched a session low of $67.64. There was no settlement price for Monday due to the Labor Day holiday in the United States.

However, oil prices found some support from strong Chinese economic indicators and continued outages of U.S. supply from Hurricane Ida.

Some 17.5 million barrels of oil have been lost to the market to date, with shutdowns expected to continue for weeks. Ida could reduce total U.S. production by as much as 30 million barrels this year, according to energy analysts.

China’s crude oil imports rose 8% in August from a month earlier, customs data showed, while China’s economy got a boost as exports unexpectedly grew at a faster pace (26.5% YoY) in August.

Data as of 6-Sep-21

At a global level, the death toll from the COVID-19 virus rose to 4.59 Million (+7,025 DoD) yesterday. The total number of active cases rose by 30,000 DoD to 18.95 million
. (Click here for details).

Asia’s naphtha crack eased on Tuesday as expectations of a contraction in monthly inflows into the region weighed on demand sentiment.

The crack fell to $133.70 a tonne from $137.23 in the previous session, while the prompt inter-month spread narrowed by 50 cents in backwardation.

The September crack is lower at $4.05 / bbl.

The October crack is at $3.85 / bbl.

Asia’s gasoline crack  fell as crude oil prices dropped after Saudi Arabia’s sharp cuts in crude contract prices for Asia sparked fears of slower demand.

The crack fell to $7.05 a barrel from $7.68 in the last session. However, the downside remained limited as import demand outlook remained strong. 

The September crack is higher at $10.15 / bbl.

The September crack is at $9.65 / bbl.



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

Cash differentials for gasoil with 10 ppm sulphur rose 4 cents to a premium of 29 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 3 cents to a discount of 22 cents per barrel to Singapore quotes on Tuesday, thanks to a firmer deal in the physical market. 

Asian refining margins for jet fuel dipped on Tuesday, but stayed within close sight of a multi-month high touched last week, as pockets of aviation demand emerge with weekly rise in airline capacity in some markets.

Refining margins or cracks for jet fuel were at $7.09 per barrel over Dubai crude during Asian trading hours, down 5 cents from a day earlier. The jet cracks hit $7.26 per barrel on Friday, their strongest since March last year.

Scheduled seat capacity in China rose 6.2% in the week to Monday, while flight capacity in India and Australia gained 2.9% and 2.8%, respectively, according to aviation data firm OAG. 

The September crack for 500 ppm Gasoil is lower at $8.10 /bbl with the 10 ppm crack at $ 9.60 /bbl. The regrade is at -$ 1.45 /bbl. 

The October crack for 500 ppm Gasoil is at $8.25 /bbl with the 10 ppm crack at $ 9.75 /bbl. The regrade is at -$ 1.10 /bbl. 

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

Tight supply and strong demand pushed Asian cash premiums for cargoes of 180-cst high-sulphur fuel oil (HSFO) to their highest since January 2020 on Tuesday.

The cash premium jumped to $22.44 a tonne to Singapore quotes, up from $14.13 a tonne in the previous session and above the recent high of $20.48 a tonne on Aug. 27.

The September crack for 180 cst FO is higher at  +$0.55 /bbl with the visco spread at $2.00 /bbl.

The October crack for 180 cst FO is at  -$2.05 /bbl with the visco spread at $2.00 /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.

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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