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Oil prices ended largely unchanged on Tuesday as tropical storm Nicholas brought heavy rain and power outages in Texas but caused less damage to U.S. energy infrastructure than Hurricane Ida caused earlier this month.

Brent Crude futures settled up 9 cents to $73.60 a barrel after hitting a session high of $74.28. U.S. West Texas Intermediate (WTI) crude settled up 1 cent, at $70.46, after touching a high of $71.22.

Oil turned negative during the session after new data from the U.S. Labor Department showed inflation cooling and as worries receded about the storm’s impact on the energy sector.

More than 39% of the U.S. Gulf of Mexico’s production of crude and natural gas remained shut on Tuesday, the regulator Bureau of Safety and Environmental Enforcement (BSEE) said. Nicholas made landfall in Texas on Monday and was to reach Louisiana on Wednesday, bringing more floods and heavy rains to the Gulf’s oil facilities. However, its impact was very limited with most Texas refineries operating normally. Texas utilities were restoring power to customers who suffered outages.

China’s crude oil throughput continued to fall in August, with daily runs hitting the lowest since May 2020, as a resurgence in coronavirus cases and a drastic cut in fuel export quotas hurt production at refineries.

Iraq set the October price of its Basrah Light crude to Asian customers at $0.85 a barrel above the average of the Oman and Dubai benchmark crudes, down $1.40 from the previous month, according to a pricing document from the state-oil marketer. Iraq has cut Basrah crude prices for Asia by a larger extent compared with Saudi grades following unsold Basra crude cargoes last month.

The IEA sees a demand rebound of 1.6 million barrels per day (bpd) in October and continued growth until the end of the year. Overall, the agency lowered its 2021 global oil demand growth forecast by 105,000 bpd to 5.2 million bpd but raised its 2022 figure by 85,000 bpd to 3.2 million bpd.

At a global level, the death toll from the COVID-19 virus rose to 4.66 Million (+8,895 DoD) yesterday. The total number of active cases fell by 70,000 DoD to 18.65 million. (Click here for details).

Asia’s naphtha crack dipped to $128.78 per tonne on Tuesday, compared with $131.03 per tonne a day earlier.

“Asian naphtha fundamentals continued to strengthen amid the drop in overall supplies expected this month, with Eastbound arbitrage flows expected to be crimped by disruptions to refinery operations nearly two weeks after Hurricane Ida,” said Krystal Chung, senior analyst at Refinitiv.

The October crack is higher at $3.90 / bbl.

Asia’s gasoline crack rose on Tuesday to its strongest level in a week on tighter regional supplies, partly due to lower exports from China in recent weeks.

Refining profit margins, also known as cracks, for gasoline climbed to $7.63 per barrel on Tuesday, the highest since Sept. 6, despite firmer feedstock crude prices. The crack was at $7.47 per barrel on Monday.

The October crack is higher at $9.60 / bbl.


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

Cash differentials for gasoil with 10 ppm sulphur slipped by a cent to a premium of 38 cents per barrel to Singapore quotes.

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, which have stayed in a negative territory for more than two weeks now, were at a discount of 6 cents per barrel to Singapore quotes on Tuesday.

Asian refining margins for jet fuel slipped on Tuesday, weighed down by firmer prices of raw material crude and lacklustre aviation demand, while global airlines trimmed scheduled capacity for the remainder of this year.

Refining profit margins, or cracks, for jet fuel dropped to $6.95 per barrel over Dubai crude during Asian trading hours, 9 cents lower from Monday, drifting away from a multi-month high of $7.26 touched in the first week of September.

Global scheduled seat capacity inched up 0.7% to about 79 million in the week to Monday, but airlines this week have removed 17 million seats for the rest of 2021, according to aviation data firm OAG. Scheduled capacity in India fell 1.8% this week, while flight capacity in China and Japan gained 3% and 5.1%, respectively, OAG data showed.

The October crack for 500 ppm Gasoil is higher at $8.25 /bbl with the 10 ppm crack at $ 9.75 /bbl. The regrade is at -$ 1.15 /bbl. 

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

Asia’s front-month 0.5% very low-sulphur fuel oil (VLSFO) crack fell to a more than one-week low on Tuesday amid easing concerns of supply shortages and as crude oil prices climbed to six-week highs.

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.

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.

The front-month VLSFO crack fell 38 cents to $12.57 a barrel above Dubai crude, its lowest since Sept. 6, Refinitiv data showed.

The October crack for 180 cst FO is higher at  -$2.25 /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.

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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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