Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose to a six-week high on Monday as U.S. output remains slow to return two weeks after Hurricane Ida slammed into the Gulf Coast and worries another storm could affect output in Texas this week.

Brent Crude futures rose 59 cents, or 0.8%, to settle at $73.51 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 73 cents, or 1.1%, to settle at $70.45. That was Brent’s highest close since July 30 and WTI’s highest close since Aug. 3.

Further disruption from bad weather could be around the corner, with the U.S. National Hurricane Center projecting Tropical Storm Nicholas will scrape along the South Texas coast on Monday and make landfall near Corpus Christi later tonight.

U.S. oil output from seven major shale formations is expected to rise by about 66,000 bpd in October to 8.1 million bpd, the highest since April 2020, according to the Energy Information Administration’s monthly drilling productivity report.

Saudi Aramco has notified at least seven buyers across Asia that it would supply full contractual volumes of crude oil in October, though none of them asked for additional supplies despite deep price cuts, sources with knowledge of the matter said on Monday.

Hopes of fresh talks on a wider nuclear deal between Iran and the West were raised after the United Nations atomic watchdog reached an agreement with Iran on Sunday about the overdue servicing of monitoring equipment to keep it running. 

At a global level, the death toll from the COVID-19 virus rose to 4.65 Million (+6,807 DoD) yesterday. The total number of active cases fell by 110,000 DoD to 18.72 million. (Click here for details).

Asia’s naphtha crack inched higher $131.03 a tonne, up from $130.35 in the previous session, amid limited arbitrage supplies and as consumers were expected to complete purchases for end-October deliveries this week.

The October crack is lower at $3.70 / bbl.

Asia’s gasoline crack scaled a one-week high on Monday, buoyed by expectations of tightening supplies amid ongoing refinery outages in the United States Gulf and looming autumn refinery maintenance in Asia.

The crack climbed to $7.47 a barrel on Monday, up from Friday’s $6.98 per barrel.

The October crack is lower at $9.10 / bbl.


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

Asia’s cash premiums for 10 ppm gasoil rose for a third straight session on Monday, soaring to their highest in more than 13 months, buoyed by firmer buying interest for physical cargoes amid limited regional supplies.

Cash differentials for gasoil with 10 ppm sulphur,  which have more than quadrupled in the last two weeks, were at a premium of 39 cents per barrel to Singapore quotes, a level not seen since late July last year.

Despite firmer feedstock crude prices, refining margins or cracks for 10 ppm gasoil climbed to $9.66 per barrel over Dubai crude during Asian trading hours on Monday, 8 cents higher from Friday.

Cash differentials for jet fuel fell by a cent to a discount of 9 cents per barrel to Singapore quotes on Friday.

The October crack for 500 ppm Gasoil is lower at $8.10 /bbl with the 10 ppm crack at $ 9.60 /bbl. The regrade is at -$ 1.15 /bbl. 

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

Cash premiums for cargoes of Asia’s 380-cst high-sulphur fuel oil (HSFO) climbed to their highest since January 2020 on Monday at $16.25 a tonne to Singapore quotes, lifted by sustained demand and tight high-sulphur fuel supplies.

The front-month VLSFO time-spread slipped to $5 a tonne on Monday, down 25 cents from Friday and away from a seven-month high of $5.50 a tonne on Wednesday, Refinitiv data on Eikon showed.

Fuel oil stocks in the ARA refining and storage fell 53,000 tonnes to 1.13 million tonnes in the week ended Sept. 9, data from Dutch consultancy Insights Global showed. Compared with last year, the inventories at the ARA hub were 8% lower and were below the five-year seasonal average of 1.24 million tonnes.

The October crack for 180 cst FO is lower at  -$2.85 /bbl with the visco spread at $2.20 /bbl.

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

No fresh trades for today. We shall consider 4Q Nap-Dubai over $ 4.00 / 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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