Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose almost 2% Thursday as those who sold crude down in the past two sessions covered their shorts amid a return of the supply issues that had fueled much of this year’s energy rally.

Brent crude futures settled up $1.53, or 1.4%, at $108.33 per barrel. WTI crude futures gained $1.60, or 1.6%, to settle at $103.79 on Thursday.

Thursday’s higher close in Brent and WTI came as Germany suggested it will halve its Russian oil imports by the summer and end them by the end of the year.

Oil traders have disputed for weeks that Berlin and the rest of the EU will be able to disengage with Russia as simply as stated, despite the West’s stand that the action is appropriate and in line with its sanctions against Moscow for the war in Ukraine.

Oil’s narrative was also made more bullish by Libya, which said Wednesday that it was losing more than 550,000 barrels per day of oil output due to blockades at major fields and export terminals.

At a global level, the death toll from the COVID-19 virus rose to 6.23 Million (+3,289 DoD) yesterday. The total number of active cases fell by 240,000 DoD to 41.51 million. (Click here for details).

Asia’s naphtha and gasoline cracks inched higher on Wednesday as inventories at top supplier, Middle East, declined. The refining profit margin for naphtha rose to $102.48 per tonne, up 95 cents from the last close.

The May crack is lower at -$ 1.50 per barrel 

Asia’s gasoline crack climbed to a record high on Thursday, despite a rise in stocks at the key trading hub of Singapore, buoyed by festival demand boost from Indonesia and a drop in U.S. inventories. The refining profit margin rose to $19.71 a barrel, up $2.77 from the last close. Gasoline margins have risen over 8% this week on the back of firm demand.

“Increased gasoline demand from Indonesia as Ramadan festivities come to an end has supported the market,” Mohammed Yasser, analyst at Refinitiv Oil Research, said in a note. With summer driving season fast approaching, gasoline fundamentals are expected to remain strong in the coming weeks, he added.

Singapore’s onshore inventory of light distillates climbed 1.922 million barrels to a three-week high of 12.998 million barrels in the week to April 20, Enterprise Singapore data showed.

The May crack is higher at $20.95 per barrel.

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

Asia’s cash differentials for 10 ppm gasoil slipped on Thursday, hurt by lacklustre buying interests for physical cargoes, while onshore middle distillate inventories in Singapore climbed to a five-month high.

Cash differentials for gasoil with 10 ppm sulphur content were at a premium of $8.55 a barrel to Singapore quotes, down 11 cents from a day earlier.

The front-month time spread for 10 ppm gasoil traded at $8.60 per barrel on Thursday, compared with $9.40 per barrel a day earlier, Refinitiv Eikon data showed.

Asian refining margins for 10 ppm gasoil rose for a second consecutive session to $42.45 a barrel over Dubai crude during Asian trade, up from $42.30 a barrel on Wednesday, and staying within close sight of an all-time peak of $44.04 a barrel hit in March.

Singapore’s middle distillate inventories rose 18.5% to 9.02 million barrels in the week to April 20, according to Enterprise Singapore data. This week’s onshore stocks, however, were still 33% lower compared with the corresponding week a year earlier.

The May crack for 500 ppm Gasoil is lower at $40.05 /bbl with the 10 ppm crack at $41.05 /bbl. The regrade is at -$10.00 /bbl.

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

Asia’s cash premiums 0.5% very low-sulphur fuel oil (VLSFO) climbed on Thursday, riding on active trading in the physical market, while refining margins for the marine fuel grade dropped to their weakest level in nearly two months.

Cash differentials for Asia’s 0.5% VLSFO were at a premium of $20.23 a tonne to Singapore quotes, compared with $19.26 per tonne a day earlier.

Partly weighed down by firmer crude prices, the VLSFO crack for May slumped to $21.09 per barrel against Dubai crude during Asian trade on Thursday, a level not seen since Feb. 25. The crack was at $21.94 a barrel on Wednesday.

The May/June time spread for VLSFO in Singapore traded at $19 a tonne on Thursday, compared with $22.50 per tonne in the previous session.

Cash premiums for 380-cst high sulphur fuel oil (HSFO) were at $26.58 per tonne to Singapore quotes on Thursday, down from $30.17 per tonne on Wednesday.

Singapore’s onshore fuel oil stocks rose 17.9% to a five-week high of 23.1 million barrels, or about 3.5 million tonnes, in the week to April 20, according to the Enterprise Singapore data.

The May crack for 180 cst FO is lower at $0.10 /bbl with the visco spread at $4.80 /bbl.

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

No fresh trades 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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