Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices jumped as much as 4% Monday as investors across markets recovered their appetite for risk after weeks of obsessing over inflation worries.

Brent futures settled up $1.93, or 2.9%, at $68.37 per barrel. WTI crude futures settled up $2.47, or 3.9%, at $66.05 per barrel.

Also propping up energy markets on Monday were expectations that Americans will fill up their tanks at least more than once this week for road trips stretching over the three-day long break into the May 31st Memorial Day holiday.

Iran and the IAEA are extending a recently expired monitoring agreement by a month, both sides said on Monday, avoiding a collapse that could have pitched wider talks on reviving the 2015 Iran nuclear deal into crisis. Iran is starting to build its offshore oil storage as chances of a new nuclear deal grow higher. Iranian oil on floating storage has more than doubled since mid-Jan’21 to 32 MMB for the week of 24 May’21, according to Kpler data

Goldman Sachs said it expects oil prices to climb to $80/bbl in 4Q’21, arguing that the market has underestimated a rebound in demand even with a possible resumption in Iranian supply.

At a global level, the death toll from the COVID-19 virus rose to 3.49 Million (+8,865 DoD) yesterday. The total number of active cases rose fell by around 340,000 DoD to 15.11 million. (Click here for details).

The COVID-19 pandemic is being perpetuated by a “scandalous inequity” in vaccine distribution, the head of the WHO said on Monday as he set new targets for protecting people in the poorest countries.

Asia’s naphtha crack rose to $99.7 per tonne, the highest since May 5, compared with $97.63 per tonne a day earlier.

The June crack crack is unchanged at $ 0.35 /bbl

Asia’s gasoline crack rose to $6.46 per barrel on Monday,  up 17 cents from the previous day.

The June crack is lower at $8.20 /bbl

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

Asian refining margins for 10 ppm gasoil dropped on Monday, weighed down by lacklustre regional demand and firmer raw material crude prices..

Cash premiums for gasoil with 10 ppm sulphur content inched higher to 18 cents per barrel to Singapore quotes, compared with a premium of 15 cents per barrel on Friday.

The June/July time spread for 10 ppm gasoil remained in backwardation to trade at 12 cents per barrel on Monday.

Cash differentials for Jet widened to a discount of 30 cents per barrel to Singapore quotes, down 9 cents from the previous day.

The June crack for 500 ppm Gasoil is lower at $6.75 /bbl with the 10 ppm crack at $ 8.55 /bbl. The regrade is at -$ 0.75 /bbl. 

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

Asia’s cash differentials for cargoes of 0.5% very low-sulphur fuel oil (VLSFO) and 380-cst high-sulphur fuel oil (HSFO) dropped to fresh multi-month lows on Monday.

he VLSFO cash differential sank to a more than eight-month low of minus $2.91 a tonne to Singapore quotes on Monday, while the differential for cargoes of 380-cst HSFO fell to a near 11-month low of minus $2.90 a tonne.

Fuel oil stocks in the ARA refining and storage fell 4%, or 51,000 tonnes, to a five-month low of 1.21 million tonnes in the week ended May 20, data from Dutch consultancy Insights Global (IG) showed.

The June crack for 180 cst FO is lower at  -$7.55 /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.

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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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