Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices tumbled more than 3% Thursday for their worst loss in a month after a key pipeline for U.S. fuel reopened from a cyberattack, erasing  gains from earlier in the week helped by a squeeze in gasoline supplies.

Brent crude futures finished the session down $2.27, or 3.3%, at $67.05. Brent’s previous sharpest loss was on April 5, when it fell 4.2%.

WTI crude futures settled down $2.26, or 3.4%, at $63.82 per barrel. It was WTI’s sharpest one-day decline as well since April 5, when it lost 4.5%.

The price drop was largely triggered by the reopening of the Colonial Pipeline that was shut for six days to contain a cyberattack on the largest fuel delivery system in the U.S. East Coast. The Colonial Pipeline was back in operation after its operator reportedly paid a $5 million ransom to the hackers of its system

India’s festering Covid situation, which was infecting more than 350,000 people a day and killing over 4,000, added to the downward pressure on oil which counts on the country as its third largest consumer.


At a global level, the death toll from the COVID-19 virus rose to 3.36 Million (+13,398 DoD) yesterday. The total number of active cases rose fell by around 70,000 DoD to 17.81 million. (Click here for details).

Asia’s naphtha crack also up although the market is remained weighed down by expectations for higher inflow of western supplies in May and the availability of cheaper alternative liquefied petroleum gas feedstock.

North Asian naphtha buyers have largely completed their purchases for second-half June delivery at similar levels seen in the previous half of the month.

The Naphtha crack to Brent settled at $96.30 /MT on Wednesday, $ 4.50, or 9% higher than the previous trading day.. 

The June crack is lower at $ 0.35 /bbl

Asia’s gasoline crack recovered on Wednesday after dipping in the previous session, but was still off highs seen earlier this week due to lower gasoline consumption in parts of Asia hit by COVID-19 restrictions.

The gasoline crack in Singapore rose 5 cents to $6.39 per barrel on Wednesday.

The June crack is lower at $8.35 /bbl

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

Asia’s cash differentials for gasoil with 10 ppm sulphur were 12 cents higher at a discount of 3 cents per barrel to Singapore quotes on Wednesday.

Diesel consumption, a key parameter linked to economic growth in India, fell 7.5% to 6.68 million tonnes in April from the previous month, but surged 105.5% year-on-year. Domestic jet fuel sales in April were at about 410,000 tonnes, compared with 480,000 tonnes in March, and 60,000 tonnes in April 2020.

Cash differentials for jet fuel, which flipped into a positive territory last week, were at a premium of 4 cents a barrel to Singapore quotes on Wednesday.

Despite hopes for more travel led by the Western countries, there is a huge disparity among markets in terms of flight bookings as the rate of vaccinations and infections vary.

China is the only major market in Asia, where flight seat capacity this week exceeded pre-pandemic levels of 2019 by 8.6%, while India’s capacity was down 42.8% and Japan was 57.2% lower, compared with the corresponding week in 2019, according to aviation data firm OAG.

The June crack for 500 ppm Gasoil is lower at $7.05 /bbl with the 10 ppm crack at $ 8.35 /bbl. The regrade is at -$ 0.55 /bbl. 

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

 Asia’s 0.5% very low-sulphur fuel oil (VLSFO) cash discount deepened to an eight-month low on Wednesday as ample supplies and sluggish demand weighed on market sentiment.

Cash discounts for cargoes of VLSFO fell to $1.82 a tonne to Singapore quotes, down from minus $1.26 a tonne in the previous session and from a premium of 35 cents at the start of the month.

Cash differentials for 380-cst high-sulphur fuel oil (HSFO) fell to a more than seven-month low of minus 87 per tonne to Singapore quotes. This compared to a premium of 23 cents a tonne at the start of the month.

The June crack for 180 cst FO is higher at  -$5.20 /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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