Crude Oil

Oil prices recovered almost all the losses of the day on a variety of stimuli. Brent crude  settled just 25 cents lower at $83.91 a barrel. WTI crude futures lost just 5 cents to settle at $74.29 a barrel.

Earlier in the day, prices had plummeted with Brent making a low of  $ 82.66 before support kicked in.

Oil prices got a boost from a new report showing a small drop in oil inventories at Cushing, Oklahoma.

On Monday, Gulf of Mexico oil companies shut down 19 percent of oil production as Hurricane Michael moved toward eastern Gulf states including Florida..


Asia’s naphtha crack slipped marginally to $93.50 a tonne amid slow demand on Monday. However, there appears to be a demand for heavy naphtha.

The balance October crack is lower  at  -$ 2.30 /bbl.

The November crack is at – $ 1.70 / bbl


No fresh news on the gasoline market today.

The balance October crack is higher at $ 7.25 / bbl.

The November crack is at $ 7.10 /bbl.

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


Cash premiums for 10ppm gasoil  climbed to 54 cents a barrel to Singapore quotes, compared with a premium of 45 cents a barrel a day on Friday. The gasoil market remains firm as supply available is quite limited on the back of steady demand at present.

While Europe has got high stocks the East West arbitrage is still closed. The Gasoil EW spread widened to minus $6.61 a tonne on Monday, from minus $4.46 a tonne on Friday. For the arbitrage to work, this spread needs to be at about minus $15 a tonne and below.

Cash discounts for jet fuel  narrowed to 21 cents a barrel to Singapore quotes on Monday as the prompt-month spread slimmed its contango structure. Jet cash discounts were at 42 cents a barrel on Friday.

The October crack has improved to $ 15.45 /bbl with the 10 ppm crack at $ 16.05 /bbl. The regrade is higher at -$ 0.50 /bbl. 

The November crack is at $ 15.60 /bbl with the 10 ppm crack at $ 16.40 /bbl. The regrade is higher at $ 0.30 /bbl


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

Fuel Oil

Cash premiums for spot cargoes of 380-cst high sulphur fuel oil (HSFO) slipped on Monday amid weaker deal values in the Singapore physical trading window but the market was still supported by relatively tight availabilities of prompt cargoes. Premiums for 380-cst cargoes slipped to a three-session low of $5.97 a tonne to Singapore quotes on Monday, down from a more than two-month high of $6.27 a tone on Friday.

The October 180 cst crack has surged to -$ 1.80 / bbl with the visco spread at $ 0.80 /bbl

The November 180 cst crack has surged to -$ 1.70 / bbl with the visco spread at $ 1.10 /bbl


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

Hedge Recommendations

Fuel oil cracks in November and December have surged up by over $ 1 /bbl. We will add to our hedges at  -$ 1.70 and -$ 1.95 / bbl respectively.

It is perhaps possible this surge could have been anticipated yesterday and we could have waited till today to lay on hedges. Having said the above, it is important that most of an organization’s hedging program is done without making calls on the market.

We would also recommend a consumer’s hedge in the Jap Nap Dubai crack for 2Q19 at -$ 2.40 /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 refiner.

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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