Crude Oil

Oil prices steadied on Monday as tensions over Iran’s nuclear program countered concerns about whether slowing global economic growth would hit oil demand. Brent crude futures fell 12 cents to settle at $64.11 a barrel. U.S.  WTI crude futures rose 15 cents to settle at $57.66 a barrel. .

Oil prices edged higher for much of the session, then eased ahead of settlement.

 Tests have shown the Iranian supertanker seized in Gibraltar last week was fully loaded with crude oil. Legal specialists say the EU sanctions only explicitly prohibit the export of jet fuel to Syria although a sale to any buyer or end user who is designated would be a breach of the regulations. Therefore, the UK was clearly in the wrong in such seizure.

Iran threatened to restart deactivated centrifuges and step up its enrichment of uranium to 20% in a move that further threatens the 2015 nuclear agreement that Washington abandoned last year. Washington has imposed sanctions that eliminate benefits Iran was meant to receive in return for agreeing to curbs on its nuclear program under the 2015 deal with world powers.

Iran’s Oil Minister Bijan Zanganeh said on Sunday that he was very hopeful of an improvement in the country’s crude exports, state TV reported. Oil prices remain under pressure from lingering worries about demand as the U.S.-China trade war has dampened prospects for global economic growth.

China’s surging crude oil imports have been masking softer details. If we take into account additional storage flows and increased fuel exports, it appears that China’s actual growth in crude consumption is far more muted at around 340 KBD in the first half of 2019.

OPEC’s compliance with its production quotas fell sharply in June, as output gains in the month by Saudi Arabia and Nigeria, along with Iraq’s continued flouting of its cap, shrank the bloc’s margin for remaining within the bounds of its supply cut agreement

Japan’s core machinery orders fell for the first time in four months in May, the biggest monthly drop in eight months in a worrying sign that global trade tensions are taking a toll on corporate investment.


Asia’s naphtha crack hit a 7-1/2 week high on Monday at $36.85 a tonne.

The return of crackers in South Korea following recent outages had given the market some support. South Korean LG Chem’s cancellation of a tender to buy naphtha last week due to unworkable offers had limited impact.

The July crack is weaker at -$ 5.50 /bbl


Asia’s gasoline margins rose for the sixth straight session to hit a 9-week high of $6.68 a barrel supported by production cuts.

Shandong Dongming Petrochemical Group will shut its crude oil refinery this week for two months for maintenance in the wake of “poor margins”. Overall, China’s fuel producers are making extended curbs to their output in the third quarter as additional supplies from mega-scaled refineries Hengli and Zhejiang Petrochemical come onboard. 

Gasoline stocks in ARA fell by 116 KT to 1.12 million tonnes.

The July crack is lower at $ 7.20 / bbl

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


Cash differentials for gasoil with 10ppm sulphur content were at a discount of 17 cents a barrel to Singapore quotes on Monday, compared with a discount of 20 cents per barrel on Friday. The July/August time spread flipped into backwardation on Monday to be at a premium of 5 cents per barrel, as against a discount of 22 cents on Friday.

Cash premiums for jet fuel dipped to 19 cents a barrel to Singapore quotes on Monday, compared with Friday’s premium of 22 cents a barrel. 

The July crack for 500 ppm Gasoil is lower at $ 13.50 /bbl with the 10 ppm crack at $ 14.20 / bbl. The regrade is at  +$ 0.45 /bbl 

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

Fuel Oil

Asia’s cash premium for 380-cst fuel oil resumed its ascent on Monday, climbing to a more than seven-year high boosted by firm building buying interest for cargoes of the fuel.

Fuel oil premiums in Asia have surged to record highs in recent weeks in one of the first signs of the impact of a shift in global ship fuel rules set to occur in 2020. 

This is atrributed to suppliers reducing their holdings of the material before lower sulphur mandates for ship fuel go into effect next year and rising consumption for the fuel to meet cooling demand in the Middle East.

Cash premiums for 380-cst HSFO jumped to at $12.58 a tonne to Singapore quotes, up from $10.25 a tonne in the previous session and their highest since February 2012.

The July180 cst crack is lower at + $ 3.35 / bbl with the visco spread at  $ 0.80 /bbl.

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

Hedge Recommendations

Nothing fresh for today.

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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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