Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices fell by $2 per barrel to their lowest in two weeks on Wednesday, as investors became more concerned that recent data will prompt more aggressive interest rate increases by central banks, pressuring economic growth and fuel demand.

London-traded Brent crude for April delivery settled down $2.45, or 3%, at $80.60, after a session low of $80.48. The global benchmark for crude is down 3% for the week, extending last week’s 4% drop.

New York-traded WTI crude saw its March delivery contract settle down $2.41, or 3.2%. at $73.95 per barrel, after a session low of $73.86. The U.S. crude benchmark was also down 3% week-to-date after last week’s slide of 4%.

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.

A massive snowstorm in the U.S. Northern Plains and Upper Midwest has also hit fuel demand, with 3,500 flights delayed or cancelled across the country so far, according to

U.S. gasoline futures slid almost 4% to their lowest in two weeks.

api data

The API data continues to be bearish. Stocks in Cushing rose 481 KB. We shall see the official data tomorrow.

Asia’s refining profit margin for naphtha rose by $3.60 to $119.05 a tonne in anticipation of lower arbitrage supplies from the West this month.

“Overall arbitrage flows should remain in the 1 million-1.5 million tonnes range, assuming that re-exports of Russian naphtha through Fujairah, Singapore/Malaysia continue, and increase, with the EU sanction now in force,” consultancy FGE said in a note.

The normal supply of naphtha into this region is of the order of 2.0 million tonnes. 

The March crack is lower at -$1.90 per barrel

Asia’s gasoline refining profit margin declined on Wednesday as Fujairah inventories swelled, although sentiment remained positive amid lower shipments from China and robust demand from Indonesia, traders said.

The crack slipped to $11.94 a barrel over Brent crude, compared with $13.16 a barrel a day earlier.

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

Light distillates stocks at the Fujairah commercial hub rose 1.049 million barrels to 8.233 million barrels in the week ended Feb. 20, S&P Global Commodity Insights data showed.

The March crack is lower at $12.90 per barrel.

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

Asia’s 10 ppm sulphur gasoil rebounded for the first time in three days to $24.07 per barrel as some trader-based buying interest re-emerged after the market touched near a one-year low.

Weak fundamentals, however, limited overall gains. There was sufficient supply in Asia as evident from the various tenders to sell March-loading material – even though China’s export volumes are slated to fall, according to estimates from industry sources.

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

Cash differentials for 10 ppm sulphur gasoil rose as much as $1.26 per barrel, reflecting the increase in buying interest for some March-loading parcels.

Jet fuel refining margins rose by a slower pace on the back of weaker demand-supply fundamentals and a closed arbitrage for Asian exports to the United States.

Demand from the heating sector has also slowed evidently from Japan, given that buyers have switched to sellers for March parcels since a week earlier. The market has already priced in the recovery in China’s domestic air travel earlier, a separate trader said.

Middle distillate inventories were at a three-week high of 1.864 million barrels at Fujairah Oil Industry Zone for the week ended Feb. 20, according to industry information service S&P Global Commodity Insights.

The March crack for 10 ppm Gasoil is lower at $23.40 /bbl. The 10 ppm regrade is at -$2.10 /bbl.

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

Asia’s very low sulphur fuel oil premium fell for a third straight day, while fuel oil inventories at UAE’s Fujairah climbed by more than 50% week-on-week. This was notwithstanding strong exports from the Middle East to Singapore

The cash differential for 0.5% VLSFO slid further to three-month lows on Wednesday, hitting $6.50 a tonne over Singapore quotes.

The March crack for 180 cst FO is higher at – $12.90 /bbl with the visco spread at $2.60 /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.

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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