Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil rose more than 2% in volatile trading on Friday, but finished the week about 7% lower as a new wave of coronavirus infections across Europe dampened hopes that fuel demand would recover soon.

Brent crude settled up $1.25 a barrel, or 2%, at $64.53 a barrel. West Texas Intermediate (WTI) U.S. crude rose $1.42, or 2.4%, to $61.42. During the session, both traded within a wide range of more than $2 a barrel. The weekly loss for both benchmarks was just under 7%.

Prices rose on Friday as many market players viewed the sell-off as overdone.

India’s crude oil processing fell to its lowest in four months in Feb’21 at 4.87 MMB/D (~18.62 MMT), down 8.8% YoY, retreating from a near one-year high hit in Jan’21, hurt by higher crude prices and weaker fuel demand.

China’s crude oil imports from Oman and the UAE rose 30% YoY and 61% YoY to 7.78 MMT and 5.25 MMT respectively in Jan-Feb’21, data from the GAC showed, as some Iranian barrels were believed to have slipped in.

US energy firms added 9 oil rigs in the week to 19 Mar’21 to total 318 (-346 YoY), the highest since May’20, according to Baker Hughes.

Money managers raised their net long US crude futures and options positions by 3,232 contracts to total 411,107 in the week to 16 Mar’21, the US CFTC said on Friday.

At a global level, the death toll from the COVID-19 virus rose to 2,727,428 (+5,927 DoD) yesterday. The total number of active cases fell by around 70,000 DoD to 21.35 million. (Click here for details)

Asia’s naphtha crack climbed on Friday, buoyed by steady petrochemicals demand and expectations for tighter near-term supplies.

The naphtha crack rose to $103.33 per tonne on Friday, up from $93.85 per tonne a day earlier. The crack, however, has shed 4.4% this week in a second straight weekly decline.

The April crack is lower at $0.70 /bbl

Asia’s gasoline crack edged higher to $5.77 per barrel on Friday, up from $5.57 per barrel in the previous session.

China’s gasoline exports rose 30.1% year-on-year in the first two months of 2021, customs data showed on Thursday, as refineries sought to ease domestic inventory pressure due to high output.

Gasoline stocks held independently in ARA slipped 1.6% to 1.4 million tonnes in the week to March 18, data from Dutch consultancy Insights Global showed. 

The April crack is lower at $6.90 /bbl.

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

Cash differentials for 10 ppm gasoil were at a discount of 24 cents per barrel to Singapore quotes on Friday, compared with a discount of 19 cents per barrel on Thursday.

Cash differentials for jet kero were unchanged at a discount of 42 cents per barrel to Singapore quotes on Friday.

Gasoil stocks held independently in ARA dropped 2.4% to 2.36 million tonnes in the week to March 18, data from Dutch consultancy Insights Global showed. ARA jet fuel inventories rose 2.3% to 986,000 tonnes.

The April crack for 500 ppm Gasoil is higher at $5.05 /bbl with the 10 ppm crack at $ 5.85 / bbl. The regrade is at -$ 1.80 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) complex ended the week lower as rising arbitrage supplies dampened market sentiment.

The VLSFO front-month time spread, refining margin and the sulphur spread all ended the week lower, Refinitiv data on Eikon showed.

Sharply lower crude oil prices overnight helped nudge the VLSFO crack 3 cents higher to $12.22 a barrel above Dubai crude on Friday, but was still down from $13.54 a barrel at the start of the week.

VLSFO cash premiums also ended the week lower at 84 cents a tonne on Friday, up 19 cents from the previous session but down from $1.43 a tonne to Singapore quotes on Monday.

The April crack for 180 cst FO is lower at  -$3.30 /bbl with the visco spread at $0.85 /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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