Crude Oil

Oil futures were up more than 1% on Thursday as a Saudi-led coalition launched air strikes in retaliation for recent attacks on its crude infrastructure. Brent crude futures  settled at $72.62 a barrel, up 85 cents.. WTI crude futures  settled at $62.87 a barrel, gaining 81 cents.

The Saudi-led military coalition in Yemen carried out several air strikes on the Houthi-held capital Sanaa on Thursday after the Iranian-aligned movement claimed responsibility for drone attacks on two Saudi oil pumping stations earlier in the week. Saudi Arabia’s deputy defence minister accused Iran of ordering the drone attack on the pumping stations. The escalation of tensions has compounded fears of lowered supply in the Middle East.

U.S. staff were ordered to leave the American embassy in Baghdad on Wednesday out of concern about perceived threats from Iran. Iraq’s oil minister Thamer Ghadhban said Thursday that international oil companies have said they are operating as normal in the country.

Asian shippers and refiners have put ships heading to the Middle East on alert and are expecting a possible rise in marine insurance premiums after the attacks. 

Production at oilfields that feed into North Sea crude grade Flotta Gold has been shut down due to repairs on the main pipeline to the export terminal in Scotland, a spokesman for the terminal operator said. The spokesman said that it was not yet clear how long the pipeline would be out of action as the company was still working out the best way to carry out repairs. A source familiar with the matter said that the repairs were expected to take one week but could last as long as a month


Asia’s naphtha crack was at a three-session high of $37.93 a tonne.

Spot naphtha demand was mostly muted as buyers have yet to emerge to replenish stocks for July delivery, but South Korea’s YNCC and Lotte Chemical were seeking naphtha through a 12-month contract starting August. Lotte Chemical sealed the deal at a premium of about $1.50 a tonne to Japan quotes on a cost-and-freight (C&F) basis, sharply lower than the $6 to $7 a tonne premium it paid for a July 2018 to June 2019 contract.

The May crack is higher at  – $ 7.60 /bbl. The June crack is at – $6.25 /bb; 


Asia’s gasoline crack also rose to a three-session high of $4.74 a barrel as inventories fell in Singapore

Light Distillate stocks in Singapore dropped to a 7 month low of 11.16 million barrels and are seasonally at the lowest levels over the past 5 years.

The May crack is higher at $ 5.45 / bbl. The June crack is at 6.05 /bbl

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


Asia’s gasoil exports this month are expected to reach 8 million tonnes versus around 7 million tonnes for April, according to a weekly report by the Refinitiv Oil Research team. 

Strong demand led to a drop in Singapore middle distillate inventories which fell 239 KB to a three-week low of 9.4 million barrels in the week to Wednesday, data from Enterprise Singapore showed. Inventories remained 32.78 % higher than a year before.

The May crack for 500 ppm Gasoil is higher at $ 13.45 /bbl with the 10 ppm crack at 14.15 / bbl. The regrade has dropped to -$ 0.60 /bbl 

The June crack for 500 ppm Gasoil is at $ 15.00 /bbl with the 10 ppm crack at 15.60 / bbl. The regrade is at -$ 0.10 /bbl 

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

Fuel Oil

Cash differentials for Asia’s 380 cst fuel oil rebounded on Thursday, climbing to their narrowest discount for this month.

Cash discounts for 380-cst HSFO were at minus 85 cents a tonne to Singapore quotes, compared with minus 98 cents per tonne in the previous session.

Singapore fuel oil inventories dropped by 2.728 million barrels from the previous week to 23.77 million barrel. This week’s onshore fuel oil inventories were 27% higher than a year earlier. 

The May 180 cst crack is higher at – $ 4.40 / bbl with the visco spread at $ 2.30 /bbl.

The June180 cst crack is at – $ 3.15 / bbl with the visco spread at $ 2.00 /bbl.


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

Hedge Recommendations

Nothing fresh to report today.  Gasoil cracks are rising in the prompt we will consider hedging 10 ppm gasoil at levels higher than $ 16.00 /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 refiner.

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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