Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices slumped by about $2 a barrel on Thursday in volatile trade as investors braced for the possible return to global markets of sanctioned Iranian oil exports and on worries that rising U.S. interest rates would weaken fuel demand.

Brent settled  $1.88, or 1.9%, at $99.34 per barrel as the London-traded global benchmark for oil gave up its tenuous hold in the $100 territory it had occupied for just two days. Prior to Thursday’s slide, Brent reached as high as $102.45 over the past week, rallying in five sessions out of six, after hitting a six-month low of 91.71 on Aug. 16..

WTI was settled down $2.31, or 2.4%, at $92.52 per barrel. Like Brent, WTI had risen in five of the past six sessions, climbing from a six-and-a-half month low of $85.73 on Aug. 16 to $95.73 earlier on Thursday.

The White House said an Iran nuclear deal that’s good for the United States will be good for the Biden administration. And that was good enough to send oil tanking back to below $100 a barrel on Thursday.

Investors also were waiting for scheduled remarks on Friday by U.S. Federal Reserve Chair Jerome Powell at the Kansas City Fed’s Economic Policy Symposium in Jackson Hole, Wyoming. “The market is a little bit concerned about what Jerome Powell is going to say tomorrow about rising interest rates,” said Phil Flynn, an analyst at Price Futures group in Chicago.

The naphtha crack plunged to the lowest since June 16 at a discount of $76.63 a tonne from a discount of $66.38 a tonne on Wednesday amid poor petrochemical demand.

The September crack is lower at -$ 21.85 per barrel 

Asia’s gasoline refining profit margin declined for a third straight session on Thursday after inventories rose at a key regional trading hub. The crack fell to $9.25 a barrel from $10.67 a barrel in the last session.

Singapore’s onshore stocks of light distillates rose by 650,000 barrels to a two-week high of 17.349 million barrels in the week to Aug. 24, official data showed.

The September crack is higher at $8.20 per barrel.

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

Asia’s refining margins for jet fuel and gasoil with 10 ppm sulphur content rose on Thursday despite a muted trading window, after stocks in the Singapore hub fell to an eleven-week low.

Cash differentials for 10 ppm gasoil stood at a premium of $1.83 a barrel to Singapore quotes, up from $1.51 in the previous session.

Refining margins or cracks for 10 ppm gasoil fell to $51.40 a barrel over Dubai crude in Asian trading hours, compared with $52.72 on Tuesday.

Cash differentials for jet spiked to a premium of 81 cents a barrel to Singapore quotes, up from a premium of 29 cents a barrel in the previous session.

Refining margins for jet fuel rose to $50.54 a barrel over Dubai crude during Asian trading hours, hitting their highest since late June, compared with $45.50 on Wednesday.

Singapore stocks of middle distillates dropped 571,000 barrels to an eleven-week low of 7.231 million barrels in the week to Aug. 24, official data showed.

The September crack for 500 ppm Gasoil is lower at $50.30 /bbl with the 10 ppm crack $54.30 /bbl. The 10 ppm regrade is at -$6.55 /bbl.

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

Cash premiums in Asia’s fuel oil market extended declines on Thursday, while Singapore inventories for residues climbed for two consecutive weeks to a seven-week high, latest data showed.

The 180-cst high sulphur fuel oil (HSFO) cash differential dipped 70 cents lower to a premium of $3.00 per tonne over Singapore quotes, with two trades emerging.

The 380-cst HSFO cash differential inched 14 cents to a premium of $3.83 per tonne over Singapore quotes, declining for six straight days..

The very low sulphur fuel oil (VLSFO) market has also retained declines through the month as higher regional supplies weighed. The 0.5% VLSFO cash differential fell $3 to a premium of $10.03 per tonne over Singapore quotes on Thursday, hovering at eight-month lows.

Singapore fuel oil inventories climbed 13% to 21.09 million barrels (3.32 million tonnes) in the week to Aug. 24, hitting a seven-week high, latest data from Enterprise Singapore showed.

The September crack for 180 cst FO is higher at – $18.45 /bbl with the visco spread at $3.95 /bbl.

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

No fresh trades for 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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