Crude Oil

Crude Oil futures had a wild see saw during the day, initially rising on expectations of a long term tie up between OPEC and Russia to control production, but eventually dropping due to renewed strength in the US Dollar. Brent futures settled 42 cents lower at $ 65.25 /bbl. The WTI March contract, which expires today settled at $ 61.90 up 22 cents from its previous settle on Friday.


Another factor that was picked on by the bulls was the falling of inventories at Cushing to its lowest level in three years. This is partly due to a new pipeline running from the hub to Memphis (which renders this figure less critical) combined with reduced flows from TransCanada’s Keystone pipeline which is yet to return to full capacity.

For attention is on whether the FOMC minutes will suggest a faster pace of rate hikes than previously expected. This could provide further support to the dollar as it recovers from a slip to three-year lows last week.

India’s crude imports rose 15.3% year on year to 4.7 mb/d in January. This marks the fourth straight month of growth in crude imports for India.


Asia’s naphtha crack extended losses for the second day on Tuesday to reach a four-session low of $69.10 a tonne but spot prices in South Korea have flipped to premiums after a couple of weeks. The market is expecting tighter naphtha supplies April versus March but it was too early to determine the volumes of cargoes scheduled for April arrival in Asia from the West including Europe and the Mediterranean. Cargoes arriving this month and those that arrived in January were above 2017’s monthly average of about 1.2 million tonnes.

The March crack is unchanged at $ 0.05 /bbl  


Asia’s gasoline crack, in contrast to naphtha, was at a five-session high of $7.98 a barrel.  Petrol shortages were seen in Nigeria, which has provided some support to the European market as the former draws on the latter’s cargoes.

India’s  gasoline exports grew 5.5%  year on year suggesting a stronger growth in gasoline consumption in January. This is reasonably given that in the previous January, India was in the throes of the after effects of demonetisation, a move which crippled demand growth.

The March 92 Ron gasoline crack has eased t0 $ 11.30 /bbl


Asia’s jet fuel cash premium persisted at more than $1 a barrel to Singapore benchmark prices, the highest since November 2012, due to a supply crunch. Jet fuel offers in the Singapore cash market remained few and far between against a constant stream of bids recently

The unusual colder-than-expected weather in Japan, healthy demand from airlines, ongoing and coming maintenance in the Middle East and Asia have turned the sector into a seller’s market.  Kerosene inventories in Japan have been falling, with official data showing that the stock level was at a six-month low in the week to Jan. 27 at 10.65 million barrels. By Feb. 10, Japan’s kerosene stocks were even lower at about 8 million barrels.

India’s diesel exports were up by an extraordinary 47.7% year on year. This could be due to increased production of gasoil to take advantage of the strong middle distillate cracks this year. The small increase in gasoline exports could indicate that refineries had switched to diesel maximisation mode.

The March paper gasoil crack has increased to $ 14.35 /bbl. The 10 ppm crack is at $ 14.95 /bbl.  The March regrade is steady at $ 1.20 /bbl today. 

Hedge Recommendations with current values in Red

March Regrade          $ 1.40     ($ 1.20)

Fuel Oil

Cash differentials of Asia’s 380-cst high sulphur fuel oil extended gains on Tuesday despite the absence of trade in physical cargoes. The fuel oil market this month has been weighed down by sluggish demand and expectations of plentiful near-term supplies.

The March 180 cst crack is higher at -$ 3.55 /bbl. The visco spread has come in to $ 1.00 / bbl.  

Hedge Recommendations with current values in Red

March          -$ 3.00     (-$ 3.85)
2Q2018        -$ 2.80     (-$ 3.45)
3Q2018        -$ 2.40     (-$ 3.15)
4Q2018        -$ 2.05     (-$ 2.75)
1Q 2019        -$ 2.35     (-$ 2.80)

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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