Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Brent crude oil slipped more than 1% in a volatile session on Tuesday as persistent concerns about global economic growth outweighed supply curbs and prompted investors to take profits on the previous day’s gains.

London-traded Brent crude for March delivery settled down $1.02, or 1.2%, at $83.05. The global crude benchmark, like WTI, has Brent has slid in three of the past four weeks, losing more than 5% in that period.

New York-traded WTI crude for March delivery, , which expired on Tuesday, fell 18 cents, or 0.2%, to $76.16 a barrel. The second-month contract slipped 19 cents, or 0.2%, at $76.27.

Earlier in the session, the market rallied, with Brent briefly turning positive, after better-than-expected business activity surveys in Europe and Britain pointed to a less gloomy European economic outlook than previously feared.

India’s crude imports rose to a six-month high in January, government data showed on Monday, as refiners in the world’s third-biggest oil importer and consumer snapped up cheaper Russian supply. However, India’s state-run Hindustan Petroleum Corp is facing difficulties in paying for Russian oil imports following the Dec. 5 price cap imposed by Western nations, a company official said on Tuesday.

Asia’s refining profit margin for naphtha to an over nine-month high of $115.45 a tonne on Tuesday as markets remained tight due to a dearth of Western supplies

The March crack is higher at -$1.25 per barrel

Asia’s gasoline refining profit margin rose on Tuesday as supplies from China dwindled, while demand from top buyer Indonesia is expected to gain steam ahead of the festival of Ramadan, traders said. The crack jumped by $1.46 to $13.16 over Brent crude oil.

Less export volumes lately from China compared with that of fourth-quarter 2022 are driving gains in gasoline markets, an India-based trader said.

The March crack is higher at $14.50 per barrel.

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

Asia’s 10 ppm sulphur gasoil margins hovered near one-year lows on Tuesday, as trading sentiment stayed weak amid unchanged fundamentals despite continuous talks of limited exports from China starting March.

Estimates from a handful of trading sources came in at 1 million tonnes for March loading, given the expectations of better demand in the local market after the seasonal winter lull.

Refining margins for 10 ppm sulphur gasoil ended the trading session at $21.18 a barrel.

Cash differentials for 10 ppm sulphur gasoil settled marginally higher at $1.10 per barrel.

Refining margins for jet fuel fell to around $19 a barrel, at a quicker pace than 10 ppm sulphur gasoil.

The March crack for 10 ppm Gasoil is lower at $24.45 /bbl. The 10 ppm regrade is at -$2.00 /bbl.

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

Cash premiums and refining margins for the very low sulphur fuel oil (VLSFO) market in Asia weakened further on Tuesday amid an influx of arbitrage supplies.

Total supplies to Asia are expected to reach about 6 million tonnes in February, firming from January’s 4-4.5 million tonnes, latest assessments by Refinitiv Oil Research showed this week.

The cash differential for 0.5% VLSFO fell to $8 a tonne on Tuesday, hitting a six-week low.

The refining margin for the product was at $9.23 a barrel at the Asia close, sliding from the previous session.

The March crack for 180 cst FO is higher at – $13.00 /bbl with the visco spread at $2.95 /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.

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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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