Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

U.S. crude prices settled above $70 per barrel Tuesday, the first time since 2018, as market participants focused on the likelihood of the government reporting another significant crude draw for last week that would underscore the summer demand for oil.

Brent crude  settled up 73 cents, or 1.1%, at $72.22 per barrel. Brent hit a two-year high of $72.38 earlier in the session.

WTI futures settled settled up 82 cents, or 1.2%, at $70.05 per barrel. It was the highest close for WTI since October 2018.

Crude oil production from OPEC+ jumped 430 KB/D MoM in May’21 to total 38.92 MMB/D, with OPEC pumping 25.71 MMB/D led by Saudi Arabia, while non-OPEC partners produced a total of 13.21 MMB/D, unchanged MoM.

Chinese authorities have ordered a unit of PetroChina to stop trading off crude oil import quotas with teapots as part of a crackdown on excessive fuel production, a move that could cut the country’s crude imports by 3%, sources said.

US crude oil production is expected to fall by 230 KB/D in 2021 to 11.08 MMB/D, the EIA said on Tuesday, a smaller decline than its forecast last month for a drop of 290 KB/D.

The EIA on Tuesday cut its 2021 world oil demand growth forecast by 10 KB/D to 5.41 MMB/D, and its 2022 oil demand growth estimate by 90 KB/D to 3.64 MMB/D.

api data

The market took the draw in crude as a bullish sign. We are more concerned by the rise in product stocks. The key, of course, lies in the demand numbers. 


At a global level, the death toll from the COVID-19 virus rose to 3.76 Million (+10,219 DoD) yesterday. The total number of active cases rose fell by around 180,000 DoD to 12.54 million. (Click here for details).

Asia’s naphtha crack extended gains to climb to $107.15 a tonne, its highest in over two months, amid concerns of tight supplies and firm demand.

The naphtha crack has climbed for five straight sessions, buoyed by expectations of an improvement in near-term demand from South Korea and lower arbitrage supplies in June.

The July crack is lower at $0.15 / bbl

Asia’s gasoline crack dropped on Tuesday as concerns over weak demand in Asia soured near-term sentiment amid rising infections in Asia.

Asia’s gasoline crack dropped to $4.80 a barrel on Tuesday, down from a six-session high of $5.18 per barrel in the previous session.

The July crack is higher at 8.25 / bbl

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

Cash differentials for gasoil with 10 ppm sulphur content improved by 3 cents to quote at a discount of 4 cents per barrel to Singapore quotes on Monday. 

The June/July time spread for the benchmark gasoil grade in Singapore narrowed its backwardation to trade at 5 cents per barrel.

Cash differentials for jet fuel were at a discount of 46 cents per barrel to Singapore quotes, while the June/July time spread for the fuel traded at minus 49 cents per barrel.

Global scheduled flight capacity rose by a meagre 0.7% this week, partly led by some western countries, but it still remained 41% lower compared with the corresponding week in pre-pandemic 2019, according to aviation data firm OAG.

The July crack for 500 ppm Gasoil is lower at $7.25 /bbl with the 10 ppm crack at $ 8.65 /bbl. The regrade is at -$ 1.05 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) cash discount narrowed further on Tuesday, extending its recovery from a multi-month low hit late May as concerns of oversupply eased and demand prospects improved, trade sources said.

The cash discount narrowed to 59 cents a tonne to Singapore quotes, compared to 88 cents on Monday and a nine-month low of $3 a tonne marked on May 25. .

Similarly, the prompt-month VLSFO contango structure narrowed to minus 50 cents a tonne, up from minus 75 cents in the previous session, Refinitiv data showed.

The June crack for 180 cst FO is lower at  -$6.85 /bbl with the visco spread at $1.20 /bbl.

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

No fresh action 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.

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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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