Crude Oil

Oil prices rose on Wednesday in what seemed like speculative purchasing even as US crude inventories rose to a record high.

Brent futures rose 55 cents to settle at $41.73 a barrel. WTI crude rose 66 cents to settle at $39.60 a barrel.

Brent crude settled up 55 cents to $41.73 a barrel. U.S. West Texas Intermediate (WTI) rose 66 cents to $39.60 after falling more than 2% in the session.

The U.S. Energy Department said on Wednesday that it had purchased 126,000 barrels of crude for the U.S. strategic reserve, supporting prices.

 India’s fuel demand nearly doubled in May’20 MoM as the country eased coronavirus-led restrictions. However industry analysts expect it to take months for consumption to reach pre-lockdown levels as the monsoon season approaches, manufacturing activities remain low and transportation demand takes a hit in some parts of the country. 

DOE data

Crude stocks rose by 5.7 million barrels in the week to June 5 to 538.1 million barrels, according to a U.S. Energy Information Administration report. The inventory build was built on the third consecutive week of big imports from Saudi Arabia, which came to more than 1.5 million bpd.

Product demand rose, however, though it remains far below levels at this time last year. Distillate inventories were higher, but the increase was smaller than in prior weeks.

Our material balance statement seems to have gone wildly out of sync for products, especially distillates. This kind of discrepancy is rarely seen and is usually followed by a huge correction.

Covid 19

At a global level, the death toll from the COVID-19 virus rose to 418,137 (+5,165 DoD) yesterday, with the total number of confirmed infections at 7,446,229 (+134,705 DoD). This is the highest single day increase recorded over the last few months. (Click here for details). 


Asia’s naphtha crack was at a two-session high of $53.38 a tonne.

The July crack is slightly higher at -$1.85 / bbl. 


Asia’s gasoline crack rose for a fourth straight session on Wednesday to $2.45 a barrel over Brent crude, the highest since March 12.

Light distillate stocks in Fujairah dropped by 231 Kb to 8.32 million barrels.

The July crack is lower at  $2.50 /bbl.

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


Asian refining margins for jet fuel rose to their highest in more than two months on Wednesday as a gradual uptick in regional flights is helping aviation demand to recover. Refining margins for jet fuel climbed to $3.25 per barrel over Dubai crude during Asian trading hours, a level not seen since March 30.

Cash discounts for jet fuel widened by 16 cents to 41 cents a barrel to Singapore quotes on Wednesday, hurt by a weaker deal in the physical market.

Middle-distillate inventories in Fujairah declined 16.4% to 5 million barrels in the week to June 8, data via S&P Global Platts showed. The weekly stocks in Fujairah have averaged 3.7 million barrels so far in 2020, compared with a weekly average of 2.4 million barrels in 2019.

The July crack for 500 ppm Gasoil is higher at $4.95 /bbl with the 10 ppm crack at $ 5.80 / bbl. The regrade is at   -$ 2.50 /bbl.

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

Fuel Oil

Delivered bunker fuel differentials for 0.5% VLSFO came under pressure over the past week. Plentiful supplies have also weighed on the VLSFO market.

Fuel oil stocks held in Fujairah jumped 6% in the week to June 8 to hit a second record high in less than a month. Fujairah inventories for heavy distillates and residues rose 1.004 million barrels from the previous week to a record high of 17.168 million barrels in the week to June 8, data via S&P Global Platts showed. Compared with year-earlier levels, the inventories were 46% higher. 

The July crack for 180 cst FO is lower at – $1.25 /bbl with the visco spread at $1.35 /bbl.

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

Hedge Recommendations

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.

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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