Crude Oil

All was quiet on the Western Front as the title of the movie went. Brent futures settled just one cent lower at $73.06 / bbl. WTI settled 37 cents lower at $ 67.89 /bbl

While the change for the day was minimal, Brent prices rose to as high as $ 74.50/bbl while WTI touched $ 69.31 /bbl.  The battle between impact of Iran sanctions and potential oversupply thus continued between buyers and sellers. 


Asia’s naphtha crack rose for a second straight session and was near a two-month high of $105.88 a tonne on strong demand. 

The August crack has jumped to  $ 0.60 /bbl an increase of 80 cents / barrel


Asia’s gasoline crack hit a 1-1/2 month high of $7.05 a barrel in tandem with firmer NYMEX gasoline futures. Gasoline fundamentals in Asia, however, were leaning on the weaker side because supplies were not lacking. Having said the above, China’s gasoline exports for June, at 1.18 million tons, were at the lowest level since June and close to 20% lower than May.

The August crack has also jumped up to $ 9.85 / bbl i.e. 80 cents higher

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


Asia’s  Asia’s front-month time spread for 10 ppm gasoil with a 10 parts per million flipped to a narrow backwardation of 1 c/ bbl on Monday reflecting a slight improvement in market sentiment. However, the upside potential could be limited over the near term due to ample Asian supplies, particularly from India and China.

China’s distillate exports in June, at 1.6 million tons and 1.0 million tons for gasoil and jet respectively were about 20% lower than the previous month.

Chinese independent refiner Shandong Haiyou Petrochemical Group and a chemical trader have filed for joint bankruptcy, according to a court filing, the latest sign of deepening pain for the sector amid high oil prices and greater regulatory scrutiny. Smaller independent or “teapot” refiners have enjoyed strong growth in recent years as China liberalized oil.

The August crack is higher at $ 14.15 / bbl with the 10 ppm crack at $ 15.05 /bbl. The regrade is lower at $ .95 /bbl

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

Fuel Oil

Asia’s 380-cst high-sulphur fuel oil market slipped on Monday with the front-month time spread and cash premium giving back some the sharp gains seen in the week before. But while the market began the week on a softer note, fundamentals remained bullish on the back of limited supplies of finished grade fuel oil and lower arbitrage volumes into Singapore in August.

The Aug/Sept time spread for 380-cst fuel oil was trading at about $8.75 a tonne on Monday, down from about $9.25 a tonne on Friday. The front-month time spread was last higher in June 2015.

The August 180 cst crack has eased a bit to -$ 0.55 / bbl with the visco spread narrowing to $ 1.25 /bbl

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

Hedge Recommendations

We close out one more tranche of the Cal 19 Jet hedges that we had laid on since February 2018 as the market sees greater certainty in the future. We are still of the opinion that  levels will ease further. However, as the objective of this segment is to point out hedges rather than trade, we will retire having made our point.

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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