Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices settled down more than 1% on Tuesday on selling driven by talk that Iran was on the cusp of a nuclear deal to end U.S. sanctions on its crude, before the Russian diplomat who made the news basically said he was misquoted.

Brent futures closed down 75 cents, or 1.1%, at $68.71 per barrel. Brent fell to as low as $67.30 intraday.

WTI crude futures settled down 78 cents, or 1.2%, at $65.49 per barrel. It earlier to a session low of $64.17.

Oil tumbled initially on reports quoting Mikhail Ulyanov, Russia’s permanent representative to the Vienna-based international organizations, as saying that “great progress” had been achieved on negotiations between Tehran and world parties for a nuclear agreement and “important news will likely come by tomorrow.” Ulyanov, however, denied later that a deal was in the cards. “I did not say there was any breakthrough in the Iran nuclear talks. There is significant progress, but issues remain,” he added.

Oil got a further reprieve from selling after the Dollar Index fell to a session low of 89.68 — a trough since Feb. 25.

The IEA is out with a landmark report on a pathway to net-zero emissions by 2050. Among the many important points in the 200-plus-page report is the call to end fossil fuel exploration. “No exploration for new resources is required,” the agency said. It also listed a series of restrictive policies that are necessary, including phasing out sales of the internal combustion engine and bans on new natural gas hookups in buildings. The conclusion is a dramatic shift in tone.

Colonial Pipeline’s said its scheduling system was back online on Tuesday after a network outage earlier in the day prevented customers from planning upcoming shipments on the biggest US fuel pipeline.

Iran will begin pumping 300 KB/D of oil through the new southern oil terminal pipeline in the coming days, SHANA reported 18 May’21. Full capacity for the pipeline is 1 MMB/D.

The API draw looks quite bullish with the crude build coming in less than expected and the solid gasoline and distillate draws. We await the official data later today. 


At a global level, the death toll from the COVID-19 virus rose to 3.42 Million (+13,943 DoD) yesterday. The total number of active cases rose fell by around 230,000 DoD to 16.45 million. (Click here for details).

Asia’s naphtha crack rose to $93.93 per tonne on Tuesday, compared with $90.32 a tonne on Monday.


The June crack has has jumped back into positive territory at -$ 0.10 /bbl

Asian refining margins for gasoline rose on Tuesday, buoyed by expectations of a demand recovery in western markets.

Refining margins, also known as cracks, for gasoline rose to $5.49 per barrel on Tuesday, compared with $4.71 per barrel a day earlier.

India’s clean products exports have jumped to 1.5 million barrels per day (bpd) in the first half of May, 65% higher compared with the same period last month, according to data analytics firm Vortexa.

China’s gasoline exports in April plunged 22.8% from a year earlier to 1.47 million tonnes, data from the General Administration of Customs showed on Tuesday. The quantity was 5.5% lower than the March figures.

For May, China’s gasoline exports are expected to fall to 1.29 million tonnes, according to energy consultants Jinlianchuang.

The June crack is higher at $7.90 /bbl

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

Asia’s cash differentials for gasoil with 10 ppm sulphur content, dropped 2 cents to a premium of 20 cents per barrel to Singapore quotes. 

China’s diesel exports in April rose 5.7% from the same period last year on resurgent overseas demand and refiners’ efforts to reduce bulging domestic stocks. Diesel shipments from China reached 2.72 million tonnes last month, down from 2.81 million tonnes in March. For May, diesel exports will decline to 1.89 million tonnes, according to energy consultants Jinlianchuang.

India’s diesel exports have increased 65% MoM during this period as demand slowed due to a fresh wave of the pandemic according to data analytics firm, Vortexa in a weekly report.

Cash differentials for jet fuel rose 1 cent to a premium of 5 cents a barrel to Singapore quotes on Monday.

China’s exports of jet fuel in Apr’21 fell 7.6% MoM to 0.66 MMT amid a 3.2% MoM decline in crude throughput, data from the GAC showed 18 May’21.

China’s flight seat capacity continued its upward streak this week, rising 1.5% compared with a week earlier, and exceeding the pre-pandemic levels of 2019 by 9.8%, according to aviation data firm OAG. But India’s scheduled capacity in the week to Monday slumped by 285,000 seats, or 12.8%, week-on-week, while Japan’s capacity dropped by 157,000 seats, or 9%, from a week ago, OAG data showed.

The June crack for 500 ppm Gasoil is higher at $7.25 /bbl with the 10 ppm crack at $ 8.55 /bbl. The regrade is at -$ 1.00 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) extended losses on Tuesday, hammered by plentiful supplies as well as weak bunkering and utility demand, trade sources said.

The VLSFO cash differential fell to its lowest level in nine-and-a-half months at minus $2.83 a tonne to Singapore quotes on Tuesday, down from minus $2.55 a tonne on Monday and a 35 cent premium at the start of the month.

The VLSFO complex was also battered in the paper market, with the front-month time-spread sinking to a 10-month low of minus $3.25 a tonne, while the front-month crack against Dubai crude dropped to a five-month low of $9.63 a barrel.

The June crack for 180 cst FO is lower at  -$7.75 /bbl with the visco spread at $0.85 /bbl.

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

No fresh action 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.

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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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