Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices fell more than 1% on Tuesday on fears about a Covid resurgence in major oil consumers India and Japan, a stock market selloff and U.S. legislative attempts to try and curb production-price fixing by OPEC.

Brent crude settled settled down 48 cents, or 0.7%, at $66.57. Brent fell to as low as $65.54 earlier in the day..

WTI crude settled down 76 cents, or 1.2%, at $62.67 per barrel. It fell to a session low of $61.54 earlier.

North Sea daily oil output in May’21 is set to drop 7% MoM to 1.6 MMB/D, according to Reuters calculations based on loading programmes provided by trade sources.

OPEC+ achieved a compliance level with its agreed oil production cuts of 113% in Mar’21, with compliance from OPEC members reaching 124%, while non-OPEC participants achieved compliance of 93%, one of the sources said.

China’s crude oil imports from top supplier Saudi Arabia rose 8.8% YoY in Mar’21 to 7.84 MMT (~1.85 MMB/D), driven by strong demand and as shipments delayed due to a port congestion finally arrived.

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.

A U.S. legislative assembly panel reportedly passed a bill to open the OPEC oil production group and countries that work with it to lawsuits for collusion in boosting petroleum prices.

Iran and world powers have made headway in talks to save the 2015 nuclear accord, although much more work is needed, a senior EU official said on Tuesday, with meetings to resume next week after consultations in their respective capitals.

Indian refiners’ crude oil processing rose 1.8% MoM, but fell 1% YoY in Mar’21 to 4.96 MMB/D as fuel demand recovered, highlighting the pandemic’s toll on economic activity.


The API data was mildly bearish with builds being reported both in crude and in distillates, which was contrary to expectations. We shall await official data tomorrow. 

At a global level, the death toll from the COVID-19 virus rose to 3,056,926 (+13,905 DoD) yesterday. The total number of active cases fell by around 90,000 DoD to 18.33 million. (Click here for details).

The number of confirmed cases of the coronavirus-borne illness COVID-19 climbed above 142 million on Tuesday, with India occupying the second slot after the United States with more than 15 million cases.

Asia’s naphtha crack slipped on Tuesday to the lowest since mid-December, amid muted buying interest as buyers stayed on the sidelines.

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

The crack weakened by 9.1% to $ 75.70 /MT from $83.25 the previous day.

The May crack is lower at -$ 0.70 /bbl

Asia’s gasoline markets remained supported by expectations of summer travel demand, particularly in the United States, and lower exports from China.

The gasoline crack eased to $6.86 a barrel on Tuesday, down 14 cents from the previous session.

The May crack is lower at $8.90 /bbl

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

Asia’s cash differentials for 10 ppm gasoil fell for a seventh straight session on Tuesday to their biggest discounts in nearly three weeks. The cash discounts widened to 33 cents a barrel to Singapore quotes, from a discount of 30 cents per barrel on Monday and marking the lowest since April 1.

Jet fuel cash differentials were minus 12 cents a barrel on Tuesday, up from minus 15 cents on the previous day.

Global airlines have reduced their full-month scheduled capacity for April by 3.7 million seats this week compared with last week, according to aviation data firm OAG.

The full-month capacity for May was cut by a further 15.3 million seats this week following a reduction of 13 million seats last week, while 23 million seats were also reduced from June capacity, OAG data showed.

However, United Airlines sees the number of domestic leisure travel passengers in June moving closer to 2019 levels while leisure travel demand to other countries is gaining in popularity as more flyers take to the sky after a year of lockdowns.

The May crack for 500 ppm Gasoil is unchanged at $5.15 /bbl with the 10 ppm crack at $ 6.35 /bbl. The regrade is at -$ 0.70 /bbl. 

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

Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) inched lower on Tuesday, while cash differentials for the marine fuel dropped amid sloppy buying interests for physical cargoes.

Cash differentials for Asia’s 0.5% VLSFO MFO05-SIN-DIF were at a premium of $1.23 a tonne to Singapore quotes, compared with $1.33 per tonne a day earlier.

The front-month VLSFO crack was at $13.31 per barrel against Dubai crude during Asian trade on Tuesday, down 6 cents from a day earlier.

Asia’s cash premium for 180-cst high sulphur fuel oil (HSFO) rose to 70 cents per tonne to Singapore quotes on Tuesday, backed by two firmer deals in the physical trade windows.

The May crack for 180 cst FO is higher at  -$3.45 /bbl with the visco spread at $0.95 /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.

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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