Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

U.S. crude prices rose Wednesday but fell short of their full potential despite the largest weekly inventory drop in three months reported by the Energy Information Administration.

Brent crude futures settled up18 cents, or 0.2%, at $73.88 per barrel. In got to above $74 in post-settlement trade.

WTI crude futures settled settled up 14 cents, or 0.2%, at $70.87 a barrel. In post-settlement trade, however, it did better, rising to above $71.

Despite the bullish numbers, crude prices remained in negative territory at first, depressed apparently by latest headlines showing a spike in infections related to Covid’s latest variant.

The late pick-up in crude prices was helped by a rally on Wall Street as the Federal Reserve matched investors’ expectations on forthcoming stimulus taper and rate hikes, after initial worries that the central bank may act too aggressively.

DOE Changes

The report was decidedly bullish as this was the greatest draw in stocks in a week since mid September.

At a global level, the death toll from the COVID-19 virus rose to 5.35 Million (+8,087 DoD) yesterday. The total number of active cases rose by 170,000 DoD to 22.32 million. (Click here for details).

Omicron cases in Denmark have surged, contributing to a record daily tally of Covid-19 infections, with some statisticians expecting the variant to represent a majority of cases in the Scandinavian country by Tuesday or Wednesday.

In Britain, Omicron is also expected to become the dominant strain by mid-December and will likely represent a majority of cases in Norway just before Christmas, the U.K. Health Security Agency said.

US health agency CDC, meanwhile, estimated  that 13% of all Covid cases in New York and New Jersey could be Omicron infections.

Asia’s naphtha crack eased after a decline in crude oil benchmarks brought prices lower. The margin slipped to $163.40 per tonne from $164.63 in the previous session.

The January crack is unchanged at $ 5.10 /bbl.

Asia’s gasoline crack inched higher on Wednesday as Middle East inventories fell after rising for two consecutive weeks.

The refining profit margins rose to $12.64 per barrel, up 19 cents, and have seen a more than 62% rise since the beginning of this month on hopes of a recovery in consumption in the region.

Stocks of light distillates at Fujairah Oil Industry Zone, including gasoline and naphtha, fell 192,000 barrels for the week to 4.205 million barrels, according to industry information service S&P Global Platts.

The January crack is lower at $12.50/ bbl.

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

Cash premiums for jet fuel rose 5 cents on Wednesday to 55 cents per barrel to Singapore quotes, a level last seen in May 2018. The differentials have climbed nearly 90% in the last month.

Asian jet fuel refining margins held at their strongest levels in more than a month on Wednesday, buoyed by hopes of further aviation demand recovery in the coming months.

Refining margins, also known as cracks, for jet fuel remained unchanged at $12.17 per barrel over Dubai crude during Asian trading hours, the highest level since Nov. 10.

The jet fuel cracks were likely weighed by concerns over the Omicron coronavirus variant last month, but have gained 41% over the last two weeks as traders expect the new variant would not substantially derail upcoming demand.

Global airline capacity for December stood at 363 million seats, after falling 3.1 million seats in the week to Monday, according to aviation data firm OAG.

“This continues the trend of recent weeks and there is no discernable reduction globally yet to account for any potential impact from the Omicron variant,” OAG said in a statement.

“It would seem that it is still too soon to say how airlines might adapt schedules in response to the new variant and a new wave of national travel restrictions.”


Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 2.2% to 2.3 million barrels in the week ended Dec. 13, data via S&P Global Platts showed. The weekly stocks in Fujairah have averaged 3.6 million barrels this year, compared with 4.2 million barrels in 2020, Reuters calculations showed.

The January crack for 500 ppm Gasoil is lower at $12.65 /bbl with the 10 ppm crack at $13.65 /bbl. The regrade is at -$0.85 /bbl.

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

A persistent supply tightness in the Singapore hub sent Asia’s 0.5% very low-sulphur fuel oil (VLSFO) market higher on Wednesday, as suppliers struggled to keep pace with demand.

The VLSFO cash premium climbed to a more than one-week high of $16.50 a tonne to Singapore quotes. In the paper market, the front-month crack climbed to a near two-week high of $18.50 a barrel above Dubai crude, Refinitiv data in Eikon showed, as crude oil prices fell.

Oil prices fell for a third day straight on Wednesday on growing signs that supply growth will outpace demand next year, and as the World Health Organization said COVID-19 vaccines may be less effective against the Omicron variant. 

Meanwhile, fuel oil inventories in the Fujairah bunkering and storage hub extended declines, slipping 2% to a six-week low in the week ended Dec. 13, data released on Wednesday showed.

The lower inventories came amid firm bunkering demand but despite limited exports from the Fujairah hub, trade sources said. 


Fujairah Oil Industry Zone inventories for heavy distillates and residues fell by 215,000 barrels, or about 34,000 tonnes, to 8.81 million barrels, or 1.39 million tonnes, data via S&P Global Platts showed. 

The fuel oil inventories were 22% lower than year-ago levels.

The January crack for 180 cst FO is higher at  -$5.95 /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.   

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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