Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices settled near seven-year highs on Tuesday, rising on the premise of a global supply squeeze despite forecasts pointing to a fourth straight weekly build in U.S. crude inventories.

Brent crude finished Tuesday’s trade up 75 cents, or 0.9%, at $85.08 per barrel. It hit a three-year high of $86.04 in the previous session.

WTI crude settled settled up 52 cents, or 0.6%, at $82.96 per barrel. On Monday, WTI hit a seven-year high of $83.87 before ending lower.

Crude prices saw support on Tuesday from news reports suggesting that Western nuclear inspectors weren’t making any headway in talks with Iran that would be crucial for advocating a drop in U.S. sanctions on Tehran’s oil that would provide a relief to the global supply squeeze.


The API reported yet another crude build with strong draws in products. This kind of data points to an increased requirement for import of products without any real shortfall of crude stocks to speak off.

At a global level, the death toll from the COVID-19 virus rose to 4.93 Million (+7,128 DoD) yesterday. The total number of active cases fell by 140,000 DoD to 17.72 million. (Click here for details).

Asia’s naphtha crack in the region eased from recent highs after crude oil prices rose, but the downside remained limited as strong feedstock demand from petrochemical units kept margins supported. The crack slipped to $149.85 a tonne from $152.78 in the last session.

The November crack is lower at $4.50 / bbl.

Asia’s gasoline crack touched a four-year peak on Tuesday amid optimism over recovering demand in the region with the easing of mobility-related COVID-19 curbs.

The refining profit margin rose to $13.43 per barrel, its strongest since September 2017, from $12.31 in the previous session.

The November crack is lower at $12.90 / bbl.

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

Asia’s cash premiums for 10 ppm gasoil surged to their highest level in more than a year on Tuesday, riding on firmer buying interests for physical cargoes, while refining margins for the industrial fuel grade lingered close to their strongest levels since January 2020.

Asia’s cash differentials for 10 ppm gasoil jumped 11 cents to  a premium of 53 cents per barrel to Singapore quotes on Monday, a level not seen since July last year. 

The front-month time spread for 10 ppm gasoil, which has widened its backwardation by over 80% in the last two weeks, traded at $1.08 per barrel on Tuesday, Refinitiv Eikon data showed.

Refining margins, also known as cracks, for 10 ppm gasoil were at $14.95 per barrel over Dubai crude during Asian trading hours, compared with $15.40 per barrel a day earlier.

Jet cash differentials rose by 9 cents to a premium of 7 cents per barrel premium.

The November crack for 500 ppm Gasoil is lower at $13.30 /bbl with the 10 ppm crack at $ 15.00 /bbl. The regrade is at -$ 0.05 /bbl. 

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

Cash premiums for cargoes of Asia’s high-sulphur fuel oil (HSFO) were near multi-month lows on Tuesday, pressured by weaker utility demand in the Middle East and South Asia as well as restocking of inventories, trade sources said.

Cash premiums for 380-cst HSFO fell to a two-month low of $4.45 a tonne to Singapore quotes. Premiums for 180-cst HSFO cargoes edged higher to $1.80 per tonne, up 15 cents from a near three-month low in the previous session.

The November crack for 180 cst FO is lower at  -$4.60 /bbl with the visco spread at $1.25 /bbl.

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

No fresh trades 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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