Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose to finish Wednesday’s session with a new five-day winning streak after U.S. crude stockpiles unexpectedly fell in the latest week, giving energy bulls yet another reason to bid up markets in the space.

Brent crude finished Wednesday’s trade up 74 cents, or 0.9%, at $85.82 per barrel. It rose to $85.88 earlier, falling short of the three-year high of $86.04 hit in the previous session.

WTI crude settled up 98 cents, or 1.2%, at $83.42 per barrel. It earlier hit a session high of $83.47, which marked a new seven-year peak.

WTI and Brent had opened Wednesday’s trade down on concerns about China’s planned intervention in the energy markets to tame soaring coal prices.

Oil refiners are ramping up output to meet a synchronised uptick in demand across Asia, Europe and the United States, but plant maintenance and high natural gas prices will constrain supply in the fourth quarter, company officials and analysts said.


The DOE report was definitely bullish any way one chooses to look at it. While the draw in crude stocks was minimal, the draw in both gasoline and distillate stocks was huge.

U.S. stocks at the Cushing, Oklahoma delivery hub hit their lowest level since October 2018. Gasoline stocks are now at their lowest since November 2019, the EIA said, while distillate stocks fell to levels not seen since early 2020.

While our material balance statement suggests that gasoline stocks should have built, the growth in implied demand to over 9.6 mbpd is impressive.

The implied demand for distillates, at 4.3 mbpd is also well among pre Covid levels suggesting that the US is functioning at near normal levels of activity. 

At a global level, the death toll from the COVID-19 virus rose to 4.94 Million (+7,494 DoD) yesterday. The total number of active cases rose by 60,000 DoD to 17.78 million. (Click here for details).

Asia’s naphtha crack extended losses as supplies from key import regions remained high. The crack declined to $146.43 a tonne from $149.85 in the previous session.

The November crack is unchanged at $4.50 / bbl.

Asia’s gasoline crack  eased from its four-year peak, but remained strong above $13 a barrel as more buyers emerged with tenders in the spot market, sources said.

The crack slipped to $13.38 a barrel from $13.43 in the last session. Indonesia’s Pertamina bought two cargoes of November-loading benchmark grade gasoline, market watchers said.

The November crack is lower at $12.25 / bbl.

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

Asia’s cash differentials for 10 ppm gasoil jumped stayed unchanged at a premium of 6 cents per barrel to Singapore quotes.

Thailand will continue limiting diesel prices at 30 baht ($0.8987) per litre to help consumers as global oil prices rise, its deputy prime minister said on Wednesday. The support will be financed by the country’s oil fund and a loan, Deputy Prime Minister Supattanapong Punmeechaow, who is also energy minister, told a news conference. He did not provide a timeframe for how long the price cap will be in place.

Middle-distillate inventories in the Fujairah Oil Industry Zone jumped 36.4% to a two-week high of 3.5 million barrels in the week ended Oct. 18, data via S&P Global Platts showed.

Asia’s cash premiums for jet fuel climbed on Wednesday as regional aviation demand recovers on easing travel curbs, while heating demand for kerosene ahead of winter is expected to provide further support in the coming weeks.

Jet cash differentials rose by 10 cents to a premium of 17 cents per barrel to Singapore quotes.

Refining margins or cracks for jet fuel were at $13.08 per barrel over Dubai crude during Asian trading hours, 10 cents lower from a day earlier, but still within close sight of multi-month highs touched in recent weeks.

Scheduled airline seat capacity in China rose 0.7% this week, while flight capacities in Japan and Australia were up 1.6% and 2.3%, respectively, according to aviation data firm OAG.

The November crack for 500 ppm Gasoil is unchanged 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.

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) prices firmed on Wednesday on signs of rising north Asian utility demand for low-sulphur residual fuels in the coming winter months amid high natural gas prices.

The front-month VLSFO crack firmed to $13.39 a barrel above Dubai crude, Refinitiv data showed, as crude prices fell.

The front-month HiLo spread climbed on Wednesday to $124.50 a tonne from $123 a tonne in the previous session, the highest in three months, Refinitiv data showed.

Fuel oil inventories in Fujairah rose by 668,000 barrels, or about 105,000 tonnes, to 7.75 million barrels, or 1.22 million tonnes, data via S&P Global Platts showed.

The November crack for 180 cst FO is lower at  -$5.50 /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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