Crude Oil

Oil prices faltered yesterday in a reflection of the uncertainty prevailing in the markets. Brent crude futures settled 38 cents lower at $ 59.92 /bbl. WTI crude futures settled 33 cents lower at $55.35 /bbl.

Traders are awaiting a speech from Federal Reserve Chair Jerome Powell on Friday that could indicate whether the U.S. central bank will continue to cut interest rates. The Jackson Hole speech is important for oil as signals from the Fed on monetary easing affect the U.S. dollar, which fell on Thursday against a basket of currencies . A weaker U.S. currency tends to support oil prices.

Concerns over the impact of U.S.-China trade tensions on the longest U.S. economic expansion on record prompted the Fed to cut interest rates last month for the first time since 2008. The prolonged trade spat has sparked worries about growth in oil demand.

US manufacturing industries recorded their first month of contraction in almost a decade amid concern about whether the U.S.-China trade conflict would tip the economy into a recession, the IHS flash domestic factory activity fell to 49.9 in August, its lowest level since Sep’09.

Forecasters such as the International Energy Agency have been lowering forecasts for world oil demand. U.S. President Donald Trump said on Wednesday he was “the chosen one” to address trade imbalances with China, even as congressional researchers warned his tariffs would reduce U.S. economic output by 0.3% in 2020.

U.S. stocks turned lower on Thursday after comments from two Fed officials dampened hopes of future interest rate cuts.   

Oil traders raced to abandon complex, bearish options trades in US crude this week, after the market rapidly shifted to reflect tighter supplies at the key Oklahoma storage hub over the past month, leading to a surge of activity in a typically illiquid corner of the market. 

Prices of heavy sweet West African crude soar as they are ideal for refining into IMO2020 compliant fuel. Nearly 3/4 of the world’s exports of heavy sweet crude come from the region, with Angolan Dalia, Chadian Doba Blend and Cameroonian Lokele alone making up most of that portion.


No fresh news on Naphtha markets.

The September crack is higher at -6.80 / bbl.


Asia’s gasoline crack eased to a two-session low of $ 6.45 a barrel on Thursday on higher inventories. Singapore’s onshore light distillates stocks rose 769 KB (7.85%) to a six-week high of 10.56 million barrels in the week to Wednesday, data from Enterprise Singapore showed. 

In India, demand for the fuel has been firm as refineries undergo maintenance and upgrading works to produce cleaner fuels. India’s July imports for petrol, at 230 KT rose to their highest since at least April 2011, data from the oil ministry’s Petroleum Planning and Analysis Cell (PPAC) showed.

The September crack is lower at $ 5.55 /bbl

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


Cash premiums for gasoil with 10ppm sulphur content  were at 36 cents a barrel to Singapore quotes on Thursday, compared with a premium of 33 cents per barrel a day earlier.

The gasoil market is expected to benefit from the shipping industry as shippers increasingly switch to marine gasoil from high sulphur fuel oil in order to comply with IMO 2020.

Cash premiums for jet fuel  rose to 17 cents a barrel to Singapore quotes on Thursday, compared with a premium of 10 cents in the previous session. 

Middle distillate stocks in Singapore fell by 918 KB to 10.04 million barrels in the week to August 21.

The September crack for 500 ppm Gasoil has dropped to $ 15.10 /bbl with the 10 ppm crack at $ 15.95 / bbl. The regrade is at  + $ 0.65 /bbl 

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

Fuel Oil

Cash premiums for Asian cargoes of high-sulphur fuel oil (HSFO) extended gains on Thursday amid elevated trade liquidity and firm buying interest in the Singapore trading window.

Cash premiums for 380-cst HSFO  climbed for a third straight session to a three-week high of $17.44 a tonne to Singapore quotes, up from $15.25 per tonne in the previous session.

Premiums for 180-cst HSFO  also rose to a three-week high of $16.57 a tonne, up from $14.25 a tonne in the previous session.

Fuel oil inventories in the Singapore reached a two-week high in the week ended Aug. 21 despite lower weekly net import volumes, according to official data.

The September 180 cst crack is higher at – 6.80  / bbl with the visco spread at  $ 2.05 /bbl.

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

Hedge Recommendations

No fresh recommendations 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 refiner.

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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