Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

The global price of oil, measured by U.K.’s benchmark Brent crude, cruised past $75 a barrel the first time in two years Tuesday as market participants awaited U.S. inventory data that could signal further supply tightening amid the approach of peak summer demand.

Brent crude settled down 9 cents, or 0.1%, at $74.81 per barrel, after scaling a session high of $75.28, a peak since April 2019.

WTI crude settled at $72.85 per barrel for the for August delivery contract, down 27 cents, or 0.4%. WTI touched $73.45 earlier, its highest since October 2018.

OPEC+ is discussing a further easing of oil output cuts from August as oil prices rise on demand recovery, but no decision had been taken yet on the exact volume to bring back to the market, two OPEC+ sources said on Tuesday.

China has issued 35.24 million tonnes of crude oil import quotas to non-state refiners in a second batch of allowances for 2021, a 35% drop from the same slot last year, according to a document seen by Reuters and two sources with knowledge of the matter.

Indian refiners’ crude throughput slipped to its lowest level in 7 months in May’21, falling 7.7% MoM to 18.97 MMT (~4.5 MMB/D) as a raging second wave of coronavirus drove a slump in domestic fuel demand and crude imports.

Hedge funds have rarely been more bullish about the outlook for oil in the last 3 years, even as prices have climbed to levels that have induced a strong response from producers in the past, purchasing the equivalent of 26 MMB in the week to 15 Jun’21.

API Data

While the crude draws continue to be astoundingly high, the products are still building. This could be a sign of better utilization of inventory rather than a shortage of oil per se. We await official data later today. 


Data not updated since June 20, 2021

At a global level, the death toll from the COVID-19 virus rose to 3.88 Million (+6,263 DoD) yesterday. The total number of active cases rose fell by around 100,000 DoD to 11.56 million. (Click here for details).

Asia’s naphtha crack slipped to $89.08 per tonne on Tuesday, compared with $90.88 a tonne on Monday.

The July crack is higher at -$0.00 / bbl

Asia’s gasoline crack edged higher on Monday, as feedstock crude prices eased, but gains were capped due to ample regional supplies.

The gasoline crack rose to $5.41 per barrel on Tuesday, up from $5.30 per barrel a day earlier.

India exported about 1.33 million tonnes of gasoline in May, compared with 930,000 tonnes in April and 1.11 million tonnes in May 2020, according to government data released on Monday.

The July crack is higher at 8.40 / bbl

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

Asian refining margins for 10 ppm gasoil dropped on Monday, as raw material crude prices firmed, but traders were hopeful that regional demand would gradually pick up pace in coming months as countries increasingly ease COVID-19 restrictions.

Cash differentials for gasoil with 10 ppm sulphur content widened their discounts to 7 cents per barrel to Singapore quotes on Monday, while the July/August time spread for the fuel traded at 2 cents per barrel.

India’s diesel exports surged 58.6% to 2.95 million tonnes in May from 1.86 million tonnes in April. The May gasoil exports were 5.7% higher year-on-year, data from PPAC showed.

Cash discounts for jet fuel widened to 34 cents per barrel to Singapore quotes on Tuesday, while the July-August time spread for the aviation fuel in Singapore remained in a contango structure to trade at minus 27 cents per barrel.

Scheduled seat capacity for global airlines this month currently stands at 301 million seats, which is 8% higher from May, but carriers have removed 2.8 million seats this week from June capacity, according to aviation data firm OAG. Air carriers have also taken out 12.5 million seats for July and a smaller amount from August and September, the firm said in a statement.

India exported country exported about 420,000 tonnes of jet fuel in May, compared with 270,000 tonnes in April and 300,000 tonnes in May 2020, data from PPAC showed.

The July crack for 500 ppm Gasoil is higher at $6.30 /bbl with the 10 ppm crack at $ 8.30 /bbl. The regrade is at -$ 0.45 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) market was largely steady after a second straight day of muted trade liquidity in the physical and paper markets, trade sources said.

The front-month VSLFO crack to Dubai crude edged 5 cents lower to $11.47 a barrel on Tuesday, Refinitiv data in Eikon showed.

The front-month VLSFO crack nudged 2 cents lower to $11.53 a barrel above Dubai crude, Refinitiv data in Eikon showed, as crude oil prices firmed.

The front-month VLSFO crack has been range bound over the past two weeks trading between $11 and $12 a barrel, the data showed, as supplies remained ample and demand sluggish.

The June crack for 180 cst FO is higher at  -$5.70 /bbl with the visco spread at $1.30 /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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