Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices plunged once again as the world tried to take a fresh look at the demand supply balance, particularly in the wake of the fresh surge in Covid 19 cases.

Brent crude settled down $3.83, or 5.9%, at $60.79. Brent came just about 50 cents from breaking its key $60 support when it hit a six-week low of $60.51. WTI settled down $3.80, or 6.2%, at $57.76 per barrel. It earlier hit a six-week low of $57.34.

The Suez Canal, one of the world’s most critical commodity chokepoints, has been blocked after a container ship, the Ever Given, ran aground 23 Mar’21, several shipping sources told S&P Global Platts.

The first cargo from new oil producer Guyana to India, departed this month from a production facility off the South American nation’s coast in a vessel chartered by trading firm Trafigura, data from Refinitiv Eikon showed.

Iranian crude oil exports remain at elevated levels in Mar’21 compared to last year, Petro-Logistics said on Tuesday, with exports averaging ~600 KB/D for the first 18 days of Mar’21, but below Jan’21 highs of 800 KB/D.

api data


The relatively modest build in crude stocks was a little more than expected. On the supportive side, gasoline stocks once again were drawn upon. Market will await official data today.

At a global level, the death toll from the COVID-19 virus rose to 2,745,391 (+10,214 DoD) yesterday. The total number of active cases fell by around 70,000 DoD to 21.22 million. (Click here for details)

Asia’s naphtha crack slipped for a second consecutive session on Tuesday as eastbound arbitrage volumes added to regional supplies. The naphtha crack,, which has shed 10% over the last two weeks, was at $99.33 per tonne on Tuesday. It was at $101.45 per tonne on Monday.

Western naphtha arrivals for March were estimated to be around 2.7 million tonnes, 23% higher than last month, Refinitiv Oil Research assessments showed.

The April crack is higher at $1.05 /bbl

Asia’s gasoline crack dipped to $5.57 per barrel on Tuesday, compared with $5.83 per barrel a day earlier.

The gasoline crack has gained 27% over the last two weeks, but traders were concerned reimposed mobility restrictions due to fresh waves of COVID-19 infections in several markets would dampen near-term demand recovery.

The April crack is lower at $6.80 /bbl.

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

Cash differentials for 10 ppm gasoil were at a discount of 22 cents per barrel to Singapore quotes yesterday, compared with an 18-cent discount on Monday.

Cash differentials for jet kero widened to a discount of 51 cents per barrel to Singapore quotes on Tuesday, compared with a discount of 46 cents per barrel on Monday.

Asian refining margins for jet fuel dropped on Tuesday, plunging to their lowest in more than four months, as fresh waves of COVID-19 infections in several markets continued to hammer aviation demand.

Global air carriers have removed 1.7 million seats from their March schedules this week, taking this month’s total planned capacity to 260 million seats, down from 278 million planned seats at the start of the month, according to aviation data firm OAG. “Carriers have also revised their schedules for the months ahead, with 4.4 million seats removed from April and 11.5 million seats removed from May this week,” OAG said in a statement.

Global airlines’ seat capacity has risen 1.4% in the week to Monday compared with last week, but was 13.8% lower than the corresponding week last year and 43.4% lower than the level in 2019, OAG data showed.

The April crack for 500 ppm Gasoil is lower at $4.60 /bbl with the 10 ppm crack at $ 5.4 / bbl. The regrade is at -$ 1.80 /bbl. 

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

Refining margins for Asia’s 0.5% very low-sulphur fuel oil (VLSFO) sank to a more than two-month low as ample arbitrage flows are expected to keep inventories well-stocked over the near term.

The front-month VLSFO crack versus Dubai dropped to $11.25 a barrel, down from $12.42 a barrel in the previous session and its lowest since Jan. 8, according to Refinitiv data.

The April crack for 180 cst FO is higher at  -$3.30 /bbl with the visco spread at $0.90 /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.

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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