Crude Oil
Crude prices settled lower on Tuesday as mixed projections over the U.S. economic outlook caused gyrations in a market that continued to capitalize on last week’s monster snow storm in Texas, the heartland of U.S. oil.
Brent futures for May settled at $64.48, 76 cents lower. WTI crude futures settled 3 cents lower at $61.37 a barrel.
US refineries are expected to take longer to return to normal output levels than US oil producers after last week’s Texas freeze, but about 5% to 10% of the oil production that was taken offline may never recover, Trafigura said on Tuesday.
Venezuela is shipping jet fuel to Iran in return for vital gasoline imports for the South American nation as part of a swap deal agreed by the two state-run oil firms, three people with knowledge of the matter told Reuters.
api data
The API reported a small build in crude stocks last evening, a report which seems to have caught the market by surprise. We believe that the material imbalance, which we had been talking about for weeks, is catching up.
covid 19
At a global level, the death toll from the COVID-19 virus rose to 2,495,336 (+10,267 DoD) yesterday. The total number of active cases fell by around 70,000 DoD to 21.92 million. (Click here for details)
Naphtha
Asia’s naphtha crack held firm despite the soaring crude oil prices, buoyed by expectations of limited Western arbitrage inflows, trade sources said.
The naphtha crack slipped marginally to $108.43 per tonne on Monday, down from a near two-week high on Friday.
The March crack is higher at $2.40 /bbl
Gasoline
Asia’s gasoline crack slipped to $4.18 per barrel on Tuesday, down by 76 cents a barrel from the previous session and a near five-month high of $5.30 a barrel on Friday.
The March crack is higher at $7.85 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10 ppm sulphur content were at a premium of 1 cent a barrel to Singapore quotes, compared with a 2 cent premium on Tuesday.
Cash discounts for jet fuel remained unchanged at 25 cents per barrel to Singapore quotes on Tuesday, while the front-month time spread for the aviation fuel in Singapore widened its contango by 3 cents to trade at a discount of 24 cents per barrel.
The March crack for 500 ppm Gasoil is lower at $7.05 /bbl with the 10 ppm crack at $ 8.25 / bbl. The regrade is at -$ 1.60 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack on Tuesday jumped to its highest in more than a year, defying soaring crude oil prices on signs of strong bunkering demand and continued supply shortages in the Singapore hub, trade sources said.
The front-month VLSFO crack jumped to $15.90 a barrel above Dubai crude oil prices, up front $15.27 a barrel in the previous session and its highest since Feb. 20 last year, according to Refinitiv data in Eikon.
The relative strength in the VLSFO market also helped lift the front-month HiLo spread, the price differentials between VLSFO and 380-cst high-sulphur fuel oil (HSFO), to a fresh one-month high of $1328.50 a tonne, Refinitiv data showed.
VLSFO cash differentials rose by 45 cents/ MT to $3.00 /MT.
180 cSt HSFO cash differentials rose by $0.11 / MT to a discount of $0.05/ MT.
The 380 cSt HSFO differentials were unchanged at a discount of $0.21 /MT.
The March crack for 180 cst FO is higher at -$3.40 /bbl with the visco spread at $0.85 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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.
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.