Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices fell about 4% on Monday, with Brent crude tumbling below $100 a barrel on worries that the COVID-19 pandemic will cut demand in China and as International Energy Agency (IEA) countries plan to release record volumes of oil from strategic stocks.

Brent crude futures  fell $4.30, or 4.2%, to settle at $98.48 a barrel. It was the lowest close for Brent since March 16.

WTI crude futures fell $3.97, or 4.0%, to settle at $94.29 per barrel. It was the lowest close for WTI since Feb. 25, the day after Russian forces invaded Ukraine.

Fuel consumption in China, the world’s biggest oil importer, has stalled with COVID-19 lockdowns in Shanghai, analysts at the Eurasia Group consultancy said. Shanghai, China’s financial center, started easing lockdowns in some areas on Monday despite reporting a record of more than 25,000 new COVID-19 infections.

Adding pressure to crude prices, the U.S. dollar was on track to strengthen for an eighth straight day against a basket of other currencies. A stronger dollar makes oil more expensive for holders of other currencies.

U.S. President Joe Biden and Indian Prime Minister Narendra Modi held talks on Monday as Washington pushed its Asian ally to support its response to Russia’s invasion.

At a global level, the death toll from the COVID-19 virus rose to 6.21 Million (+2,027 DoD) yesterday. The total number of active cases fell by 503,000 DoD to 44.04 million. (Click here for details).

Asia’s gasoline and naphtha refining profit margins extended gains on Monday as crude oil prices declined and rising demand in the region lifted market sentiment.

The naphtha crack rose to $142.98 a tonne, up $11.57 from Friday. 

The May crack is lower at $ 3.35 per barrel 

Asia’s  gasoline crack climbed to $16.63 a barrel from 16.57 in the last session..

India’s fuel demand rose to a three-year high in March, with petrol sales hitting an all-time peak. Sales of gasoline were 6.2% higher from a year earlier at 2.91 million tonnes, the highest ever, according to data going back to 1998.

On the supply side, China’s gasoline outflows for April are estimated at about 600,000 tonnes, the lowest level this year, Refinitiv data showed. But the volumes are heavier than initially anticipated after the government urged state-owned refiners to suspend fuel exports for the month.

The May crack is higher at $18.25 per barrel.

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

Asian refining margins for 10 ppm gasoil inched higher on Monday as feedstock crude prices fell, while cash differentials for the industrial fuel grade rose amid active buying interests for physical cargoes.

Cash premiums for gasoil with 10 ppm sulphur content slipped to $7.35 a barrel to Singapore quotes on Friday, down from Thursday’s $8.68 a barrel that was a record high, according to Reuters data going back to late 2011.

Refining margins, also known as cracks, for 10 ppm gasoil rose 20 cents to $30.51 a barrel over Dubai crude during Asian trading hours on Monday, following a 15% gain last week.

Cash premiums for gasoil with 10 ppm sulphur content climbed to $7.57 a barrel to Singapore quotes on Monday, up from $7.35 a barrel at the end of last week.

The April/May time spread for 10ppm gasoil traded at $8.12 a barrel on Monday, compared with $8.50 per barrel on Friday.

Singapore’s middle distillate inventories have plunged to their lowest in more than eight years this week, as the biggest exports of automotive diesel went to Netherlands at around 35,400 tonnes.

Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp refining and storage hub STK-GO-ARA dropped 6.2% to 1.5 million tonnes in the week ended April 7, according to Dutch consultancy Insights Global. ARA jet fuel inventories fell 1.1% this week to 947,000 tonnes.

Gasoil stocks this week have slid to their lowest level since April 2014.

The May crack for 500 ppm Gasoil is lower at $30.25 /bbl with the 10 ppm crack at $31.25 /bbl. The regrade is at -$4.80 /bbl.

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

Asia’s cash premiums for 0.5% very low-sulphur fuel oil (VLSFO) dropped on Monday, hurt by a couple of weaker deals in the physical market.

Cash differentials for Asia’s 0.5% VLSFO were at a premium of $21.81 a tonne to Singapore quotes, down from $22.28 per tonne on Friday.

The VLSFO crack for May slipped to $22.85 per barrel against Dubai crude during Asian trade on Monday, compared with $23.16 per barrel at the end of last week.

The 380-cst HSFO barge crack for May traded at a discount of $10.85 a barrel to Brent on Monday, compared with minus $11.98 a barrel on Friday.

Cash premiums for Asia’s 0.5% VLSFO climbed to $22.28 a tonne to Singapore quotes on Friday, up from $21.49 per tonne on Thursday.

 Fuel oil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub slipped 0.9% to 865,000 tonnes in the week to April 7, data from Dutch consultancy Insights Global 

The May crack for 180 cst FO is higher at $4.95 /bbl with the visco spread at $6.50 /bbl.

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

No fresh activity 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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