Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Crude prices fell for a fifth day on Wednesday, as investors remain worried about the outlook for fuel demand as COVID-19 cases surge worldwide just as more supply reaches the market from large global producers, including the United States.

Brent Crude futures ended down 80 cents, or 1.2%, at $68.23 a barrel. The global benchmark has lost 11% in the last 13 trading days dating to the end of July. 

WTI futures settled down $1.13, or 1.7%, to $65.46 a barrel. 

doe data

The large draw apparently seems to have been caused by a surge in exports which rose by over 750 kbpd. The gasoline demand continues to remain disappointing.


The distillate draw, which, as per our material balance statement, appears to be understated, has arisen from very strong increase in demand.

At a global level, the death toll from the COVID-19 virus rose to 4.40 Million (+10,553 DoD) yesterday. The total number of active cases rose by 150,000 DoD to 17.47 million. (Click here for details).

Asia’s naphtha crack eased on Wednesday for a fifth straight session, and the inter-month spread between first-half October and November narrowed further in backwardation to its lowest since December 2020.

The crack fell to $116.93 a tonne from $120.55 in the last session, while the inter-month spread slimmed to $2.50 per tonne.

The September crack is unchanged at $3.40 / bbl.

Asia’s gasoline crack recouped losses on Wednesday as a series of trades on window lifted prices for the benchmark 92-octane grade. The crack rose to $9.02 a barrel from $8.29 in the previous session.

Light distillate stocks in Fujairah rose marginally by 92 kb to 5.6 million barrels.

The September crack is higher at $9.55 / bbl.


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

Cash differentials for gasoil with 10 ppm sulphur content were at a premium of 7 cents per barrel to Singapore quotes on Tuesday, 6 cents higher than the previous day.

Cash differentials for jet fuel dropped 4 cents to a premium of 6 cents per barrel to Singapore quotes on Wednesday.

Asia’s cash premiums for jet fuel dropped on Wednesday amid muted buying interest in the physical market, while refining profits for aviation fuel in Singapore dipped for a fifth consecutive session.

Refining margins for jet fuel, which have shed 17.2% in the last two weeks, were down 1 cent on Wednesday at $5.35 per barrel over Dubai crude during Asian trading hours, the lowest since June 30.

The front-month time spread for jet fuel remained in a contango structure to trade at minus 6 cents per barrel, Refinitiv data showed.

Middle-distillate inventories in the Fujairah Oil Industry Zone jumped 35.3% to 4.05 million barrels in the week ended Aug. 16, data via S&P Global Platts showed.

The September crack for 500 ppm Gasoil is higher at $6.75 /bbl with the 10 ppm crack at $ 8.25 /bbl. The regrade is at -$ 1.05 /bbl. 

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

The cash premium in Asia for cargoes of 0.5% very low-sulphur fuel oil (VLSFO) jumped to $2.19 a tonne to Singapore quotes on Wednesday, the highest since March 4.

By contrast, the VLSFO front-month time spread and crack against Dubai crude were largely steady on Wednesday, Refinitiv data showed, amid expectations of ample near-term supplies and sluggish demand.

Fujairah Oil Industry Zone inventories for heavy distillates and residues fell by 1.08 million barrels, or about 170,000 tonnes, to 9.77 million barrels, or 1.54 million tonnes, data via S&P Global Platts showed.

The September crack for 180 cst FO is higher at  -$4.45 /bbl with the visco spread at $1.45 /bbl.

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

No fresh activity for 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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