Crude Oil

Oil prices rose around 1% on Thursday as speculators placed bets on the OPEC+ group cutting output further. Brent futures rose  55 cents to settle at $56.34 a barrel. WTI crude futures rose 25 cents to settle at $51.42 a barrel.

The death toll from the COVID-19 in mainland China rose to 1,489 (+121 DoD) yesterday, with the total number of confirmed infections at 63,918 (+4,036 DoD). The virus’s effect on energy markets is worsening, as the sharp fall in demand in China is stranding oil cargoes off the country’s coast and prompting shippers to seek out other Asian destinations. Storage levels at Shandong are near their peak volumes seen last in Jun’19.

The IEA expects oil demand in the first quarter to fall for the first time in 10 years before picking up from the second quarter. The agency cut its full-year global growth forecast to 825 kbpd.

Some Middle East crude oil producers have asked Asian buyers if they could take more crude under their term supply contracts, as Chinese refiners cut purchases due to Covid – 19, sources close to the matter told Reuters on Thursday. Needless to say, this will reduce the impact of any additional future cut in crude output.

Lower fuel demand expectations have shifted the market structure for both Brent and WTI into a contango – where prompt prices are lower than those for later dates. The six-months spread of Brent futures contracts settled at about minus 26 cents.

In other news, India has offered to partially open up its poultry and dairy markets in a bid for a limited trade deal during the US President’s first official visit to the country this month, people familiar with the protracted talks say.


Asia’s naphtha crack fell for the second straight day on Thursday, this time by 4.6% to reach a four-session low of $89.30 a tonne.

The March crack has dropped to – $ 2.10 / bbl. 


Asia’s gasoline crack, in contrast to naphtha, rose to a two-day high of $8.64 a barrel.

China’s final export volumes for February and March are not immediately available, but January volumes were at least 300 KT lower than December.

A decline in demand due to China’s move to restrict travelling on the roads to contain the coronavirus has led to its refiners and teapot refiners cutting runs.

Singapore onshore light distillates stocks eased 358 KB to reach a two-week low of 13.166 million barrels in the week to Wednesday, data from Enterprise Singapore showed.

The March crack has dropped to $8.35 /bbl

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


Cash premiums for 10 ppm gasoil were at 66 cents per barrel to Singapore quotes, compared with 72 cents a barrel on Wednesday.

Cash differentials for jet fuel were at a discount of 9 cents a barrel to Singapore quotes, compared with a narrow premium of 2 cents per barrel on Wednesday.

Singapore onshore middle distillate stocks climbed 8.8% to a more than four-month high of 11.6 million barrels in the week to Feb. 12, Enterprise Singapore data showed. Weekly middle distillate inventories have averaged 10.7 million barrels so far in 2020, having averaged 11.1 million barrels a week in 2019. Overall, onshore middle distillate inventories were 1.8% higher year-on-year.

The March crack for 500 ppm Gasoil has dropped to $11.35 /bbl with the 10 ppm crack at $ 12.00 / bbl. The regrade is at   -$ 1.50 /bbl. 

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

Fuel Oil

Cash premiums for Asia’s 0.5% VLSFO cash premiums were at $2.03 a tonne to Singapore quotes, their lowest since records began in December. The VLSFO market has been declining steadily over recent weeks, retreating from record highs near the start of the year.

Singapore’s residual fuel oil inventories rose by 377 KB (about 2% ) from the previous week to 22.06 million barrels, data from Enterprise Singapore showed. Compared with the same period last year, residual fuel stocks were 5% lower. Demand for Singapore bunkers has been recently limited by seasonally weaker demand during the Chinese Lunar New Year holiday that has been compounded by the spread of the coronavirus.

The March 180 cst crack has improved to -$ 8.20/ bbl with the visco spread at  $ 1.20 /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

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