Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices edged higher on Monday, supported by a weaker U.S. dollar but gains were capped by concerns about the impact on demand from rising coronavirus cases in India.

Brent crude settled up 28 cents, or 0.4%, at $67.05 a barrel, after rising 6% last week. WTI futures ended the session up 25 cents, or 0.4%, at $63.38 a barrel, having gained 6.4% last week.

Saudi Arabia’s crude oil exports fell to 5.625 MB/D in Feb’21, the lowest since Jun’20, JODI said on Monday, as the world’s biggest oil exporter voluntarily capped output to support oil prices.

Libya’s NOC declared force majeure on Monday on exports from the port of Hariga and said it could extend the measure to other facilities due to a budget dispute with the country’s central bank.

Hedge funds resuming buying petroleum last week, with a focus on Brent, purchasing the equivalent of 19 MB in the week to 13 Apr’21, as confidence steadied following the wave of selling and sharp drop in prices a month ago.



At a global level, the death toll from the COVID-19 virus rose to 3,042,863 (+9,813 DoD) yesterday. The total number of active cases fell by around 40,000 DoD to 18.24 million. (Click here for details).

Deaths from COVID-19 in India also rose by a record 1,619 to nearly 180,000.

Asia’s naphtha crack weakened on Monday as demand is expected to soften with crackers heading into maintenance season, while gasoline margins held steady supported by lower exports from China.

Cracker operators have also started switching to cheaper liquefied petroleum gas (LPG) feedstock, which reduces demand for naphtha, traders said.

The crack weakened by 8.1% to $ 83.25 /MT from $90.58 the previous day.

The May crack is lower at -$ 0.40 /bbl

Asia’s gasoline crack climbed to $7.00 a barrel on Monday, up 9 cents from the previous session.

China’s exports in March was at 1.56 million tonnes, down 14.6% from 1.83 million tonnes in March 2020, when the COVID-19 pandemic had dampened Chinese demand for the motor fuel, data from the General Administration of Chinese Customs showed. 

The May crack is higher at $9.00 /bbl

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

Asia’s cash differentials for 10 ppm gasoil fell for a sixth straight session on Monday to their biggest discounts in nearly three weeks as elevated exports from China and the spread of COVID-19 in some Asian markets weighed on the market, trade sources said. The cash discounts widened to 30 cents a barrel to Singapore quotes, from a discount of 25 cents per barrel on Friday and marking the lowest since April 1.

The front-month time spread for the benchmark gasoil grade in Singapore, which has stayed in a contango structure since early March, slipped to minus 15 cents per barrel on Monday.

Jet fuel cash differentials, however, jumped to minus 15 cents a barrel on Monday, up from minus 34 cents at the end of last week on hopes that a travel bubble discussion could help support the aviation fuel market.

Global scheduled airline capacity for the week starting 19 Apr’21 was down 2% WoW to 61.1 million seats, according to OAG. Global seat capacity was at 57.3% of Jan’20 levels.

The May crack for 500 ppm Gasoil is lower at $5.15 /bbl with the 10 ppm crack at $ 6.35 /bbl. The regrade is at -$ 0.75 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) slipped on Monday, falling back from multi-week highs hit last week, as sluggish prompt bunker demand amid stiff regional competition and ample supplies weighed on sentiment.

The cash premium eased further to $1.33 a tonne to Singapore quotes on Monday, down 11% on Friday’s levels.

The May crack for 180 cst FO is lower at  -$3.55 /bbl with the visco spread at $0.90 /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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