Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices settled mixed on Tuesday, as prospects of tight inventories worldwide were offset by forecasts of a production increase in coming months and concerns over rising coronavirus cases in Europe.

Brent crude futures rose 38 cents, or 0.5%, to $82.43 a barrel. WTI crude futures fell 12 cents, or 0.2%, to $80.76 a barrel.

The IEA expects average Brent prices to be around $71.50 per barrel in 2021 and $79.40 in 2022, while Rosneft said it may reach $120 in the second half of 2022, according to the TASS news agency.

Worries about demand destruction also weighed as Europe has again become the epicentre of the COVID-19 pandemic, prompting some governments to consider reimposing lockdowns, while China is battling the spread of its biggest outbreak caused by the Delta variant.

The dollar touched a 16-month high against a basket of currencies after strong U.S. retail sales data. A stronger dollar makes oil more expensive for buyers using other currencies.

At a global level, the death toll from the COVID-19 virus rose to 5.12 Million (+5,315 DoD) yesterday. The total number of active cases rose by 40,000 DoD to 19.35 million. Yesterday’s figure was wrongly reported by the website. (Click here for details).

Asia’s naphtha crack extended losses on Tuesday after crude prices rose and worries over slowing supplies dented market sentiment.

The crack dropped to $159.05 a tonne from $168.83 in the last session. The inter-month spread between first-half January and February widened to $15.25 in backwardation.

The December crack is lower at $ 4.20 /bbl.

Asia’s gasoline crack fell to $10.95 a barrel from $11 in the previous session.

India’s gasoline sales continued to stay above pre-COVID-19 levels, rising to 1.04 million tonnes, preliminary sales data of state-run refiners showed, as people continued to prefer using personal vehicles over public transport for safety reasons.

The December crack is higher at $10.85 / bbl

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

Asia’s cash premiums for 10 ppm gasoil slipped on Monday, drifting away from multi-month highs touched last week, as some demand worries sprang back due to a resurgence in China’s COVID-19 cases.

Cash differentials for gasoil with 10 ppm sulphur content were at a premium of 65 cents per barrel to Singapore quotes, compared with 69 cents per barrel on Monday.

India’s gasoil demand contracted by about a fifth during the first fifteen days of November from the pre-COVID levels, after a festive season led brief recovery last month, preliminary sales data of state-run refiners showed. Gasoil consumption totalled 2.43 million tonnes between Nov. 1-15, a decline of about 15.3% from last year and down 19.35% from the same period in 2019, the data showed.

Cash differentials for jet fuel slipped to 15 cents per barrel to Singapore quotes on Tuesday, reflecting limited buying interest in the physical market. The jet cash differentials were at a 29-cent premium on Monday.

Asia’s refining profit margins for jet fuel inched higher on Tuesday, despite firmer feedstock crude prices, as improving airline capacity in several markets across the region provided support.

Refining margins or cracks for jet fuel climbed to $10.12 per barrel over Dubai crude during Asian trading hours, up from $10.03 per barrel a day earlier.

Scheduled seat capacity for global airlines rose 1.4% to 76.4 million seats this week, which is about 28% lower compared with their levels for the corresponding period in pre-pandemic 2019, aviation data firm OAG showed. China’s flight capacity rose 0.8% in the week to Monday, while seat capacity in Japan and South Korea this week were up 0.7% and 2.8% respectively, the OAG data showed. 

The December crack for 500 ppm Gasoil has jumped to $11.40 /bbl with the 10 ppm crack at $ 12.70 /bbl. The regrade is at -$ 0.75 /bbl. 

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

Asia’s front-month 180-cst high-sulphur fuel oil (HSFO) crack narrowed its discount to Dubai crude on Tuesday but was still near recent lows that were triggered by rising supplies and lower than expected utility demand.

Despite higher crude oil prices on Tuesday, the front-month 180-cst HSFO crack was at $7.31 a barrel below Dubai crude prices, up from minus $8.14 a barrel on Monday, Refinitiv data showed.

By contrast, the more actively traded 380-cst HSFO barge crack was virtually unchanged on Tuesday at $14.23 a barrel below Brent crude. The front-month crack sank to a near two-year low of minus $15.20 on Oct. 27. 

The December crack for 180 cst FO is higher at  -$6.95 /bbl with the visco spread at $1.35 /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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