Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Crude prices eased on Thursday as oil infrastructure appeared to have escaped serious damage from the earthquake that devastated parts of Turkey and Syria, while U.S. inventories swelled and investors worried about Federal Reserve rate hikes.

London-traded Brent crude for March delivery settled Thursday’s regular session down 59 cents, or 0.7%, at $84.50. Like WTI, Brent gained nearly 7% between Monday and Wednesday, after a 7.5% tumble last week.

New York-traded WTI crude for March delivery settled down 41 cents, or 0.5%, at $78.06 per barrel. The U.S. crude benchmark rose nearly 7% in the past three sessions to almost erase last week’s 7.5% drop. That plunge came on the back of recession fears and uncertainty in U.S. interest rate direction after bumper job and wage gains among Americans in January threatened to once again ratchet up inflation.

Asia’s Naphtha crack declined slightly to $82.93 per tonne, reflecting the continuously weak market fundamentals. Trading liquidity stayed thin unlike gasoline, as evidenced from the lack of deals in the open market for a fourth consecutive day, weighing on price movements.

The March crack is higher at -$3.40 per barrel

Asia’s RON-92 gasoline cracks declined to $13.34 per barrel on stronger oil futures despite gains in physical prices and continuously strong buying interest from one China major.

The market was generally bullish on limited prompt stock levels in China, even though domestic Chinese prices were still in a contango shape where prompt prices are lower than forward month prices.

Singapore light distillate stocks held by up to 14 major oil and oil storage companies drop to 16.766 million barrels, a two-week low, as of Feb.8, according to data released on Thursday by Enterprise Singapore.

The March crack is lower at $14.50 per barrel.

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

Asia’s 10 ppm sulphur gasoil margins reversed the one-day uptrend and weakened to $25.42 per barrel amid firmer oil futures, but firm buying interest cushioned overall market weakness.

Gasoil cash differentials went up to $1.33 per barrel because of strong buying interest from Vitol, despite readily available offers from end-February to March from other traders

Jet fuel refining margins surged at a quicker pace, narrowing the regrade to a discount of 20 cents, as strong demand expectation continued to buoy market sentiment.

Singapore middle distillates stocks held by up to 14 major oil and oil storage companies drop to a seven-week low of 7.607 million barrels as of Feb. 8, according to data released on Thursday by Enterprise Singapore.

The March crack for 10 ppm Gasoil is lower at $24.10 /bbl. The 10 ppm regrade is at -$0.75 /bbl.

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

Bunker premiums have softened this week after cargo premiums eased, while landed stocks at trading hub Singapore reached five-week highs. The landed stocks climbed despite a drop in weekly net imports, as weaker ship refuelling demand, trade sources said.

Bunker premiums for 0.5% very low sulphur fuel oil (VLSFO) decreased to between $20 and $25 a tonne over Singapore quotes this week, traders said.

The spot cargo market weakened for a fifth consecutive session, with the cash differential easing to $21.85 a tonne over Singapore quotes on Thursday.

Onshore fuel oil stocks climbed by 3% to 21.24 million barrels (3.34 million tonnes) in the week ended Feb. 8, Enterprise Singapore data showed.

The March crack for 180 cst FO is higher at – $17.95 /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. However, we may hedge more gasoline should gasoline Q2 crack rise above $14.00 / 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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