Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices jumped on Wednesday and settled up more than 1% as U.S. Gulf of Mexico producers made slow progress in restoring output after Hurricane Ida.

Brent Crude futures settled up 91 cents, or 1.3%, at $72.60 and U.S. West Texas Intermediate (WTI) crude settled up 95 cents, or 1.4%, to $69.30 a barrel.

About 77% of U.S. Gulf production remained offline on Tuesday, or about 1.4 million barrels per day (bpd). About 17.5 million barrels of oil have been lost to the market so far. The Gulf’s offshore wells make up about 17% of U.S. output.

“Refinery operations appear to be making a quicker recovery,” ING analysts said in a note. Capacity of about 1 million bpd was temporarily closed, down from a peak of more than 2 million bpd, ING said, citing the latest situation report from the Department of Energy.

U.S. crude oil production is expected to fall by 200,000 barrels per day in 2021 to 11.08 million bpd, the U.S. Energy Information Administration (EIA) said on Wednesday, noting that Hurricane Ida should force a bigger decline than its previous forecast for a drop of 160,000 bpd.

api data

The API data has reported a massive draw in gasoline stocks. The other numbers are closer to expectations. We shall await official data later today.


At a global level, the death toll from the COVID-19 virus rose to 4.61 Million (+9,754 DoD) yesterday. The total number of active cases fell by 20,000 DoD to 18.88 million. (Click here for details).

Asia’s naphtha crack dipped after stocks in Japan rose. The crack slipped to $128.90 a tonne, from $133.70 in the last session.

Japan’s naphtha inventories rose 43,000 kilolitres to 1.63 million last week weighing on market sentiment.

“Naphtha demand in Asia is lower with several crackers undergoing maintenance or delaying start-ups post-maintenance,” Vortexa said in a research report.

The September crack is lower at $3.75 / bbl.

The October crack is at $3.55 / bbl.

Asia’s gasoline crack dropped below $7 a barrel on Wednesday as inventories in Japan increased, and Middle Eastern stocks showed a nominal decline after rising for four straight weeks.

The crack fell to $6.54 per barrel, down from $7.05 in the previous session.

Denting demand outlook, Japanese stocks rose 42,000 kilolitres to 1.62 million, according to data released by the Petroleum Association of Japan.

Stockpiles of light distillates at Fujairah Oil Industry Zone, including gasoline and naphtha, registered a slight fall of 7,000 barrels, or 0.1%, on the week to 5.755 million barrels, after rising by 289,000 barrels in the previous four weeks. 

The September crack is lower at $9.50 / bbl.

The September crack is at $9.10 / bbl.


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

Cash differentials for gasoil with 10 ppm sulphur were unchanged at a premium of 29 cents per barrel to Singapore quotes.

Asian refining margins for 10 ppm gasoil held near their strongest levels since March last year, buoyed by strong arbitrage demand from the West, while traders said lower Chinese exports in recent weeks have partly helped tighten regional supplies.

Refining margins, also known as cracks, for 10 ppm gasoil remained unchanged $9.71 per barrel over Dubai crude during Asian trading hours, 10 cents lower from Friday’s $9.81 per barrel that was the highest since late-March last year.

Steady arbitrage flows to the West have boosted the Asian gasoil market as Europe is restocking heating oil ahead of winter, while U.S. supplies remain limited after Hurricane Ida hit critical energy infrastructure in the region.

Middle-distillate inventories in the Fujairah Oil Industry Zone rose 8.4% to a three-week high of 3.98 million barrels in the week ended Sept. 6, data via S&P Global Platts showed.

Cash differentials for jet fuel rose by 7 cents to a discount of 15 cents per barrel to Singapore quotes on Wednesday.

The September crack for 500 ppm Gasoil is lower at $7.85 /bbl with the 10 ppm crack at $ 9.35 /bbl. The regrade is at -$ 1.55 /bbl. 

The October crack for 500 ppm Gasoil is at $7.95 /bbl with the 10 ppm crack at $ 9.45 /bbl. The regrade is at -$ 1.10 /bbl. 

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

Cash differentials for 180-cst high-sulphur fuel oil (HSFO) extended gains on Wednesday, climbing to a near two-year high of $24.44 as tightening supplies struggle to keep up with soaring demand.

The 180-cst HSFO prompt-month time spread also jumped to $20 a tonne, the highest since November 2019, while the front-month 180-cst HSFO crack discount narrowed to $1.68 below Dubai crude, Refinitiv data in Eikon showed.

Fujairah Oil Industry Zone inventories for heavy distillates and residues rose by 478,000 barrels, or about 75,000 tonnes, to 8.72 million barrels, or 1.37 million tonnes, data via S&P Global Platts showed. Compared to the same period last year, however, Fujairah fuel oil inventories were 35% lower.

The September crack for 180 cst FO is lower at  +$0.45 /bbl with the visco spread at $2.70 /bbl.

The October crack for 180 cst FO is at  -$2.25 /bbl with the visco spread at $2.20 /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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