Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Crude prices fell 2% on Thursday, slumping a third day in a row, after a fresh punch from an old nemesis: Iran. World powers negotiating to bring Tehran back into a nuclear accord canceled by former U.S. President Donald Trump have accepted that major sanctions imposed since 2018 on the Islamic Republic’s crude exports be lifted, President Hassan Rouhani told Iranian television.

Brent futures settled down $1.55, or 2.3%, at $65.11 per barrel. Brent slid to a 3-week low of $64.81 intraday.

WTI crude futures settled down $1.41, or 2.2%, at $61.94 per barrel. It earlier fell to a 3-week low of $61.69.

Both contracts are down around 5.2% for the week.  Another point to note about yesterday’s settle was that it is very close to the low, unlike that of previous days.

India’s crude oil imports in Apr’21 were little changed MoM, but was up 10.3% YoY, at 18.26 MMT, as a second COVID-19 wave forced several states to impose mobility restrictions, stemming fuel demand and leading to larger stockpile.

India’s oil products’ imports rose about 24.1% YoY to 3.50 MMT, while exports slumped 35.8% YoY to 3.88 MMT, with diesel accounting for a major share at 1.86 MMT, data from the PPAC showed.

At a global level, the death toll from the COVID-19 virus rose to 3.44 Million (+13,032 DoD) yesterday. The total number of active cases rose fell by around 460,000 DoD to 15.87 million. (Click here for details).

Asia’s naphtha crack rose to its highest level in two weeks on Thursday as crude prices weakened further.

Asia’s naphtha crack climbed to $98.20 per tonne from $93.45 per tonne a day earlier.

The June crack has is higher at $ 0.65 /bbl

Asia’s gasoline crack inched higher to $6.61 per barrel on Thursday, compared with $6.16 per barrel on Wednesday.

Singapore’s light distillate inventories rose 1.5% to 12.6 million barrels in the week to May 19, according to Enterprise Singapore data.

The June crack is higher at $8.70 /bbl

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

Asia’s cash premiums for 10 ppm gasoil inched up on Thursday after middle distillate inventories in Singapore dropped to a two-week low, while the front month spread for the industrial fuel held near its widest backwardation in three months.

Cash differentials for gasoil with 10 ppm sulphur content were at a premium of 17 cents per barrel to Singapore quotes, compared with 16 cents per barrel a day earlier.

The front-month time spread for 10 ppm gasoil were at 16 cents per barrel on Thursday, as against 13 cents a barrel on Wednesday.

Singapore’s middle distillate inventories slipped 2.5% to 13.6 million barrels in the week to May 19, according to Enterprise Singapore data.

Cash differentials for jet fuel dropped by 11 cents to a discount of 14 cents per barrel to Singapore quotes on Thursday.

The June crack for 500 ppm Gasoil is higher at $7.05 /bbl with the 10 ppm crack at $ 8.85 /bbl. The regrade is at -$ 0.60 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) market complex edged higher on Thursday, after steep losses earlier in the week, on concerns of weak demand and ample supply.

VLSFO cash differentials, front-month time spreads and cracks against Dubai crude all edged higher on Thursday, away from multi-month lows on Tuesday.

Meanwhile, 380-cst cash differentials scrapped a fresh 10-month low of minus $2.32 a tonne as a weakening fundamental supply-demand outlook continued to weigh on sentiment.

Singapore fuel oil stocks dropped by 1.42 million barrels, or about 223,000 tonnes, to 24.96 million barrels, or 3.93 million tonnes, Enterprise Singapore data showed.

The June crack for 180 cst FO is higher at  -$6.90 /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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