Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rebounded Tuesday as market bulls looked forward to data likely to show another draw in US crude stockpiles.

Brent Crude rose $1.32, or 1.8%, to reach $76.48 per barrel.

WTI crude futures settled up $1.15, or 1.6%, at $75.25 a barrel.

The Paris-based IEA said global storage drawdowns in the third quarter were set to be the biggest in at least a decade, citing early June stock draws from the United States, Europe and Japan.

Nuclear talks between world powers and Iran are not likely to resume until after the Islamic Republic installs its new president next month, restricting another potential source of supply.

China’s crude imports dropped by 3% from January to June compared with a year earlier, the first such contraction since 2013, as import quota shortages, refinery maintenance and rising global prices curbed buying. Imports fell nearly 13% in the second quarter versus the first three months as inventories climbed and refining margins were squeezed by steadily rising global oil prices and a flood of imports of blending fuels, such as light cycle oil that slipped into the diesel pool.


At a global level, the death toll from the COVID-19 virus rose to 4.07 Million (+8,117 DoD) yesterday. The total number of active cases shot up by 100,000 DoD to 12.11 million. (Click here for details).

Olympics host city Tokyo has entered a fresh state of emergency on Monday, less than two weeks before the Games begin, while South Korea has implemented the toughest COVID-19 curbs in Seoul as the country battles the highly contagious Delta variant..

Asia’s naphtha crack dipped to $133.13 per tonne, after reaching its highest since Nov. 13, 2017 of $133.55 per tonne on Monday. 

The August crack is higher at $2.90 / bbl

Asia’s gasoline crack was assessed at $8.65 per barrel, down from $8.94 per barrel in the previous session.

The August crack is lower at $10.40 / bbl

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

Cash differentials for 10 ppm gasoil, which have doubled their discounts over the last three weeks, were at a discount of 13 cents per barrel on Tuesday.

Cash differentials for jet fuel were at a discount of 40 cents per barrel to Singapore quotes on Tuesday, compared with a discount of 37 cents per barrel a day earlier.

Scheduled capacity for global airlines improved 1.5% this week to about 79.8 million seats, but remains 32.9% lower compared with the corresponding week in pre-pandemic 2019, according to aviation data firm OAG.

Japan’s flight capacity in the week to Monday was 20% lower compared with the corresponding period in 2020, and 55.6% lower from 2019, while seat capacity in South Korea this week was down 46.4% versus 2019, OAG data showed.

The August crack for 500 ppm Gasoil is unchanged at $7.00 /bbl with the 10 ppm crack at $ 8.50 /bbl. The regrade is at -$ 0.75 /bbl. 

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

Cash premiums for cargoes of Asia’s 0.5% very low-sulphur fuel oil (VLSFO) climbed to a three-month high on Tuesday despite absent deal activity in the Singapore trading window.

The VLSFO cash premium climbed to $1.53 a tonne to Singapore quotes on Tuesday, up from $1.07 on Monday and its highest since April 15, Reuters data showed.

Pointing to a tighter supply outlook, backwardation in the front-month VLSFO time spread hit a more than four-month high of $2.50 a tonne on Monday and was unchanged on Tuesday, Refinitiv data in Eikon showed.

The 380-cst high-sulphur fuel oil (HSFO) barge crack for January was at a discount of $11.96 a barrel to Brent, compared with minus $12.12 a barrel on Friday.

Asia’s cash premium for 380-cst high sulphur fuel oil (HSFO) dropped to 45 cents per tonne to Singapore quotes on Monday.

The August crack for 180 cst FO is unchanged at  -$6.65 /bbl with the visco spread at $1.20 /bbl.

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

No fresh trades today. We will lay on one tranche more of Jap-Nap Dubai should the crack climb above $ 3.50 per bbl.

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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