Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

U.S. crude prices dipped for the first time in five days on Wednesday but stayed firmly above the $80 per barrel mark as the trade awaited inventory data that could show a third straight weekly build.

Brent crude  settled at $83.18 per barrel, down 24 cents, or 0.3%. It was Brent’s second straight decline after a three-day winning streak that netted more than 3%.

WTI crude settled down 20 cents, or 0.25%, at $80.44 per barrel. WTI has gained more than 4% in four previous days of trade.

Prices came under pressure early when China, the world’s biggest crude importer, released data showing September imports fell 15% from a year earlier.

However, in another show of resolve, oil bulls refused to allow any meaningful drop in prices despite OPEC trimming its world demand growth forecast for 2021. Russian President Vladimir Putin also said he did not want to see crude prices skyrocket, although he admitted that $100 a barrel was a possibility.

While oil prices closely follow economic growth, the current rally in crude is completely at odds with the inflationary burden experienced by economies emerging from 18 months of varying hardship imposed by the coronavirus pandemic.

The IMF said in its World Economic Outlook on Tuesday noted that the momentum of growth has weakened while uncertainty has increased.  The IMF is concerned that surging commodity prices will force central banks into tightening cycles that could trigger selloffs in global equities.

api data

While crude stocks built by an astonishing 5.2 million barrels, product stocks have declined by huge amounts as well, leaving the data in balance. Official data is awaited today. 


At a global level, the death toll from the COVID-19 virus rose to 4.89 Million (+7,521 DoD) yesterday. The total number of active cases fell marginally DoD to 17.66 million. (Click here for details).

Asia’s naphtha crack in the region gained as crude oil prices eased, while the prompt inter-month spread widened in backwardation by $4.75.

The crack rose to $146.43, the highest since Aug. 10, from $145.88 in the last session.

The November crack is higher at $4.55 / bbl.

Asia’s gasoline crack extended gains for a second straight session on Wednesday and touched over three-year highs despite an increase in Middle Eastern inventories, as easing of pandemic-related mobility curbs stoked demand hopes.

The crack rose to $11.04 a barrel, the highest level since August 2018, from $10.80 in the last session.

“We expect several countries in Asia to continue easing restrictions through to year-end as they slowly shift their policies towards living with COVID-19 amid high vaccination rates,” Dylan Sim, oil market analyst at FGE said.

Stocks of light distillates at the Fujairah Oil Industry Zone, including gasoline and naphtha, rose by 1.311 million barrels or 28.4% on the week to 6.013 million barrels, according to industry information service S&P Global Platts.

The November crack is higher at $12.15 / bbl.


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

Asia’s cash differentials for 10 ppm gasoil dipped by a cent to a premium of 44 cents per barrel to Singapore quotes on Monday.

Middle-distillate inventories in the Fujairah Oil Industry Zone plummeted 33% to a more than one-year low of 2.59 million barrels in the week ended Oct. 11, data via S&P Global Platts showed. The Fujairah inventories were last lower in April 2020.

Asia’s jet fuel market eased on Wednesday, giving back some of the sharp gains recently as cash premiums and refining margins fell.

Jet cash differentials also fell to a 6 cent per barrel premium, down from a near two-year high of 20 cents in the previous session, amid weaker deal values and supplier offers for cargoes of the fuel in the Singapore trading window.

The front-month jet crack fell to $12.47 a barrel above Dubai crude on Wednesday, down from $12.96 a barrel in the previous session, Refinitiv data in Eikon showed.

The November crack for 500 ppm Gasoil is higher at $13.15 /bbl with the 10 ppm crack at $ 15.15 /bbl. The regrade is at -$ 0.05 /bbl. 

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

Cash premiums for Asian cargoes of high-sulphur fuel oil (HSFO) extended declines on Wednesday, falling to fresh two-month lows amid weak spot demand and a narrowing prompt market structure.

Cash premiums for both 180-cst HSFO and 380-HSFO fell to near two-month lows of $5.40 per tonne and $7.66 per tonne to Singapore quotes, respectively.

The front-month VLSFO crack climbed to a three-week high of $13.17 a barrel above Dubai crude on a tightening supply outlook as refiners maximise middle distillate output and expectations of increased regional demand from utilities.

Fujairah Oil Industry Zone inventories for heavy distillates and residues fell by 1.09 million barrels, or about 172,000 tonnes, to 7.08 million barrels, or 1.12 million tonnes, data via S&P Global Platts showed. Fujairah’s fuel oil inventories were 21% lower than year-ago levels.

The November crack for 180 cst FO is lower at  -$2.50 /bbl with the visco spread at $1.40 /bbl.

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

No fresh trades 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 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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