Crude Oil

Oil prices were steady on Tuesday. Brent crude futures settled unchanged at $62.29 a barrel. WTI crude futures settled one cent higher at $53.27 a barrel.

Prices fell after U.S. crude stockpiles unexpectedly rose by 4.9 million barrels in the week to June 7 to 482.8 million. U.S. government data is due to be released at 10:30 a.m. EDT (1430 GMT) on Wednesday.

The U.S. EIA cut its 2019 world oil demand growth forecast by 160,000 barrels per day to 1.22 million bpd.

Beijing said it will allow local governments to use proceeds from special bonds as capital for major investment projects, in a bid to support the slowing economy amid an escalating trade war with the United States.

Russian energy minister Alexander Novak said on Monday there is still a risk that oil producers pump out too much crude and prices fall sharply, suggesting Moscow might support an extension. Russia’s average oil output stood at 11.04 million bpd on June 1-10, up from an average of 10.87 million bpd on June 1-3. Oil output in the first three days of June was the lowest since mid-2016, according to Reuters calculations.

The US China trade pact continues to stay in limbo. President Donald Trump said he’s personally holding up a trade deal with China and that he won’t complete the agreement unless Beijing returns to terms negotiated earlier in the year.

China’s oil import slump is more than just the loss of Iranian crude. Major Chinese refineries closed several refining units in May, which would have crimped crude appetite; It’s also likely that much of the build-up of commercial inventories for the commissioning of Hengli Petrochemical Co’s new 400,000 bpd refinery was completed. A further bearish factor for Chinese crude demand was the drop in exports of refined products in May, possibly as a result of falling margins for fuels such as diesel and gasoline. Additionally, much of the output being reduced by OPEC is of the heavier crude grades favoured by many Chinese refiners, and it’s possible that the efforts of OPEC and its allies have disproportionately fallen on China.

Hedge fund managers are liquidating bullish oil positions at the fastest rate since the fourth quarter of 2018 amid increasing fears about the health of the global economy. Hedge fund long positions now outnumber short positions by a ratio of 4:1, down from almost 9:1 on April 23, according to an analysis of exchange and regulatory records. 

aPI Data

According to the data released by the API yesterday, crude inventories once again grew substantially by 4.852 million barrels, a number that looks increasingly bearish for crude.


Asia’s naphtha physical remained at a discount for the fourth straight session. Benchmark open-specification naphtha margin were at a discount of $3.50 a tonne to Brent crude, a marked increase compared to discounts of $15.38 and $9.80 on Friday and Monday, respectively.

LG Chem is expected to restart its mega-scale cracker next week after shutting it down unexpectedly last week. South Korea’s YNCC bought more than 50,000 tonnes of open-specification grade cargoes for second-half July delivery to Yeosu at discounts of about $5.75 a tonne to Japan quotes on a cost-and-freight (C&F) basis, the lowest price it has paid since December 2018.

This came a day after KPIC resumed purchases after an absence of at least two months. KPIC bought on Monday a full-range naphtha cargo for first-half August arrival at Onsan at a single-digit a tonne discount to Japan quotes on a cost-and-freight (C&F) basis. The petrochemical maker was last seen with tenders to buy March cargoes which it bought at premiums.

The June crack has improved to  – $8.60 /bbl. The July crack is at -$7.10 /bbl


No fresh news on the gasoline markets.

The June crack is lower at $ 4.40 /bbl. The July crack is at $ 5.15 / bbl

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


Cash differentials for 10ppm gasoil  were at a discount of 20 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 19 cents a barrel on Monday.

The market remains well supplied with the The East-West arbitrage window for gasoil firmly closed. The gasoil EFS, which determines the gasoil price spread between Singapore and North West Europe , was around minus $11 per tonne on Tuesday. Arbitrage can be worked when this spread in the range of minus $15-18 a tonne or below, according to trade sources. 

Cash discounts for jet fuel  widened to 31 cents a barrel to Singapore quotes on Tuesday, from 22 cents per barrel in the previous session. Refining margins for jet fuel  slipped by a cent to $13.53 barrel over Dubai crude on Tuesday.

The June crack for 500 ppm Gasoil is higher at $ 12.45 /bbl with the 10 ppm crack at $ 13.15 / bbl. The regrade is at  +$ 0.05 /bbl 

The July crack for 500 ppm Gasoil is at $ 13.80 /bbl with the 10 ppm crack at $ 14.50 / bbl. The regrade is at  +$ 0.05 /bbl 

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

Fuel Oil

Asia’s cash premiums for 380-cst high-sulphur fuel oil rose on Tuesday, hovering near their highest levels in three months, backed by steady buying interest.

Cash premiums for 380-cst high-sulphur fuel oil  were at $3.10 a barrel to Singapore quotes, compared with a premium of $3.05 per barrel a day earlier.

The June/July 380-cst time-spread  remained in a backwardated structure and traded at about $5.25 a tonne on Tuesday.

The more actively traded 380-cst barge crack to Brent crude  edged up to minus $6.73 a barrel from minus $7.07 on Monday.

The June180 cst crack has improved to  – $ 0.35 / bbl with the visco spread at $ 1.75 /bbl.

The July180 cst crack is at  – $ 0.45 / bbl with the visco spread at $ 1.25 /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 refiner.

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

Leave a Comment