Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices edged higher on Tuesday after OPEC said it hoped for demand recovery in the second half if India gets out of its Covid situation by then.

Brent crude futures finished up 23 cents, at $68.55. WTI crude futures settled up 36 cents at $65.28 per barrel.

The Organization of the Petroleum Exporting Countries said in a monthly report that demand will rise by 5.95 million barrels per day this year, or 6.6%, just as it forecast last month. The report however warned of “significant uncertainties,” mainly around the pandemic.

US crude oil production is expected to fall by 290 KB/D in 2021 to 11.02 MMB/D, the US EIA said on Tuesday, a steeper decline than its previous forecast for a drop of 270 KB/D.

Libya pumped 1.168 MMB/D of crude in Apr’21, down 115 KB/D MoM,  the North African producer revealed to OPEC in the producer group’s latest monthly oil market report.

India’s Apr’21 fuel demand fell 9.4% MoM to 17.01 MMT, as the world’s third largest oil consumer bore the brunt of raging coronavirus infections, with the prospect of further restrictions weighing on the outlook.

api data

The API data was slightly bearish given market expectations. The gasoline build would probably have been a huge surprise given the onset of the driving season. We shall await official data today. 


At a global level, the death toll from the COVID-19 virus rose to 3.31 Million (+13,144 DoD) yesterday. The total number of active cases rose fell by around 110,000 DoD to 17.96 million. (Click here for details).

Asia’s naphtha crack slipped dropped $.4.63, or 4.8% to $91.80 a tonne on Tuesday, weighed down by rising supplies and weakening demand in parts of the region due to mobility restrictions following resurgence in COVID-19 cases.

The June crack is higher at $ 0.85 /bbl

Asia’s gasoline margin also dropped as India continues its grim battle against Covid 19.

The gasoline crack in Singapore slipped 35 cents to $6.34 per barrel on Tuesday.

M.K. Surana, chairman of Hindustan Petroleum Corp, expects India’s fuel consumption in May to fall by 5% from April although the impact on driving and industrial production is not as severe as last year.

The June crack is higher at $8.90 /bbl

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

Asia’s cash differentials for gasoil with 10 ppm sulphur were one cent lower at a discount of 15 cents per barrel to Singapore quotes on Tuesday.

Cash differentials for jet fuel however, rose by 2 cents to a premium of 11 cents a barrel to Singapore quotes on Tuesday.

Scheduled seat capacity for global airlines was 43.4% lower in the week to Monday compared with the corresponding week in pre-pandemic 2019, but 98.4% higher than this week last year, according to aviation data firm OAG. In a clear disparity between markets in terms of flight bookings, U.S. passengers booked about 800,000 more flight seats in the week ended Monday on-week, OAG data showed, while India had 275,000 fewer seats and Japan was down by about 347,000.

Robust air cargo demand should remain a bright spot for the airline industry as international travel gradually recovers from the coronavirus crisis, industry body IATA said on Tuesday.

The June crack for 500 ppm Gasoil has jumped to $7.45 /bbl with the 10 ppm crack at $ 8.75 /bbl. The regrade is at -$ 0.35 /bbl. 

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

Asian cash differentials for cargoes of 380-cst high-sulphur fuel oil (HSFO) extended losses on Tuesday, dipping to a fresh 2021 low amid sluggish seasonal demand for use in power generation and ample supplies, trade sources said.

The HSFO market is expected to receive a boost from increased demand from Middle Eastern utilities in the hot summer months, primarily Saudi Arabia, but the ramp up in demand for Asia cargoes has so far been slow compared to last year, the sources said.

The 380-cst HSFO cash discount slipped to minus 64 cents a tonne to Singapore quotes, down from 52 cents on Monday and its widest discount since Dec. 31.

The June crack for 180 cst FO is higher at  -$4.80 /bbl with the visco spread at $0.85 /bbl.

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

No fresh action 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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