Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices fell Monday as concerns about demand fears stoked by the rapid global rise in Omicron coronavirus infections overtook concerns about oil supply reduction from Kazakhstan.

Brent crude futures fell 88 cents, or 1.1%, to settle at $80.87 a barrel. WTI crude futures was down 67 cents, or 0.9%, at $78.23 a barrel.

Libyan production ticked up on Monday, and concerns about rising Libyan output overtook the market. Kazakhstan’s largest oil venture Tengizchevroil (TCO) is gradually increasing production to reach normal rates at the Tengiz field after protests limited output there in recent days, operator Chevron said on Sunday.

At a global level, the death toll from the COVID-19 virus rose to 5.51 Million (+5,131 DoD) yesterday. The total number of active cases rose by 2.3 million DoD to 44.8 million. (Click here for details).

The Chinese port city of Tianjin announced plans Monday to test its 14 million residents within the next 48 hours after the discovery of a cluster of Covid cases, including two of the highly transmissible Omicron variant.

Asia’s naphtha crack naphtha crack rose for a second consecutive session to $137.43 a tonne from $132.43 on Friday, after posting a loss of over 19% last week.

The February crack is lower at $2.65 per barrel. 

Asia’s gasoline crack edged lower on Monday over fuel demand concerns arising from surging Omicron cases across the globe.

The refining profit margin eased to $10.53 a barrel, down 14 cents from Friday’s close. However, the downside remained limited as most countries in the region have refrained from imposing strict mobility-related curbs to rein in spread of the COVID-19 variant.

The February crack is lower at 11.70 /bbl.

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

Asia’s cash premiums for 10 ppm gasoil dipped on Monday, hurt by a weaker deal in the physical market, but traders expect the market to remain tight in the near term.

Cash premiums for gasoil with 10 ppm sulphur content dipped to 73 cents per barrel to Singapore quotes, compared with 86 cents per barrel on Friday.

Refining margins, also known as cracks, for 10 ppm gasoil rose to a two-month high of $14.48 a barrel over Dubai crude during Asian trading hours, up from $14.08 per barrel on Friday.

Meanwhile, jet fuel cracks climbed to $12.63 per barrel over Dubai crude on Monday, against $11.78 a barrel at the end of last week.

Cash differentials for jet fuel flipped to a premium of 9 cents per barrel to Singapore quotes on Monday, compared with a discount of 2 cents per barrel on Friday.

The February crack for 500 ppm Gasoil is higher at $13.75 /bbl with the 10 ppm crack at $14.75 /bbl. The regrade is at -$0.85 /bbl.

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

 Asia’s 0.5% very low-sulphur fuel oil (VLSFO) firmed on Monday, recovering most of last week’s losses as limited blendstock inflows fuelled concerns over tightening supply.

The front-month VLSFO crack climbed to 2022 high of $14.64 a barrel above Dubai crude, up from $13.80 a barrel in the previous session, Refinitiv-Eikon data showed. 

Similarly, VLSFO cash differentials were bid higher to $14.10 a tonne to Singapore quotes although no cargo trades were reported.

The February crack for 180 cst FO is lower at  -$7.15 /bbl with the visco spread at $1.20 /bbl.

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

No fresh action for 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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