Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Crude markets settled with their biggest loss in two weeks on Thursday after Russian President Vladimir Putin said the OPEC+ cartel which includes Moscow might put out more barrels than it has announced.

Brent crude settled down $1.21, or 1.4%, at $84.61 per barrel. Brent hit a three-year high of $86.09 on Tuesday.

WTI crude settled down 92 cents, or 1.1%, at $82.50 per barrel — its biggest one-day drop since Oct. 6. WTI fell to as low as $80.81 earlier. On Wednesday, it hit a high of $84.25, marking a seven-year peak.

Adding to downward pressure were several other factors. For one, a downgrade to cold conditions by the National Oceanic and Atmospheric Administration, leading to expectations that much of the United States will have a warmer-than-average winter. Falling coal prices in Asia also pressured prices.

At a global level, the death toll from the COVID-19 virus rose to 4.95 Million (+7,154 DoD) yesterday. The total number of active cases rose by 80,000 DoD to 17.86 million. (Click here for details).

Asia’s naphtha crack gained as feedstock demand from petrochemical units kept margins supported. The crack rose to $149.43 per tonne from $146.43 in the previous session.

The November crack is higher at $4.85 / bbl.

Asia’s gasoline crack surged to over four-year high on Thursday after U.S. stocks fell unexpectedly to a near two-year low amid strong demand.

The crack to climbed to $14.79 a barrel, strongest since Aug. 2017, from $13.38 in the last session. The refining profit margin for gasoline has nearly doubled this month as demand recovers thanks to several Asian countries easing COVID-19 movement curbs.

Light Distillate inventories in Singapore increased by 796,000 barrels to a four-week high of 12.344 million barrels last week. The stockpiles registered a gain for the first in a month.

The November crack is higher at $12.75 / bbl.

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

Asian refining profit margins for 10 ppm gasoil dipped on Thursday, but hovered near their strongest levels since early last year, while middle distillate inventories in Singapore plunged to a 22-month low.

Asia’s cash differentials for 10 ppm gasoil rose 6 cents to a premium of 70 cents per barrel to Singapore quotes.

Refining margins, also known as cracks, for 10 ppm gasoil dipped to $14.49 per barrel over Dubai crude during Asian trading hours, 32 cents lower from a day earlier.

Singapore’s middle distillate inventories dropped 5.1% to 9.8 million barrels in the week to Oct. 20, a level not seen since Jan. 8, 2020, according to Enterprise Singapore data.

Jet cash differentials rose by 3 cents to a premium of 20 cents per barrel to Singapore quotes.

The November crack for 500 ppm Gasoil is lower at $12.85 /bbl with the 10 ppm crack at $ 14.55 /bbl. The regrade is at $ 0.05 /bbl. 

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

Asia’s high-sulphur fuel oil (HSFO) market dropped on Thursday, amid further signs of easing regional utility demand and rising supplies.

Asia’s 180-cst HSFO front-month crack fell to $5.95 a barrel below Dubai crude, its widest discount since late July, Refinitiv data showed.

In the physical market, 380-cst HSFO cash premiums also fell to their lowest since July at $1.24 a tonne to Singapore quotes amid sharply lower deal activity.

Fuel oil inventories in Singapore rose by 138,000 barrels, or about 22,000 tonnes, to 21.69 million barrels, or 3.42 million tonnes, Enterprise Singapore data showed. But the residual fuel stocks were still 11% lower from year-ago levels and below the 2021 weekly average of 22.78 million barrels.

The November crack for 180 cst FO is lower at  -$6.85 /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.

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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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