Crude Oil

Oil futures rose slightly on Tuesday after news that OPEC planned to persist with production cuts. Brent crude futures rose 45 cents to settle at $65.21 a barrel. U.S. crude ended just 2 cents higher at $55.50 a barrel.

Trump’s tweet calling for OPEC to ease its efforts to boost oil prices apparently fell on deaf years as OPEC said that it would stick to its agreement and push for more adherence from its members and producer allies to tighten crude supplies.

Libya’s internationally recognized government agreed with the state oil company to reopen the country’s largest oilfield, El Sharara, weighing on prices.

API Data

Prices extended gains in post-settlement trade after the API reported U.S. crude inventories fell by 4.2 million barrels in the week ending Feb. 22 to 444.3 million. This was against market expectations for a build. However, Crude stocks at Cushing rose by 2 million barrels. The API also reported a surprise draw in gasoline stocks where the market was expecting a build. Distillate stocks, however, built in the face of market expectations for a draw.


Asia’s naphtha crack edged up 80 cents to a two-session high of $42.43 a tonne on Tuesday following a drop in raw material Brent crude prices.

South Korea’s Hanwha Total has bought heavy full-range naphtha for first-half April delivery but details were not immediately available.

The drop in Naphtha prices is having a cascading effect on prices of condensates which can act as feedstock for condensate splitters. Australia’s North West Shelf (NWS) condensate for instance was recently sold at its widest discount in more than five years with demand affected by more attractive naphtha price..

The March crack is higher at -$ 6.95 /bbl


Asia’s gasoline margins extended gains to a seven-week high of 99 cents a barrel premium to Brent crude. Gasoline inventories in the United States were expected to have fallen by about 1.8 million barrels last week.  

The March crack has jumped to $ 1.85 /bbl

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


Cash differentials for 10 ppm gasoil narrowed their discounts for a fifth consecutive session to be at 17 cents a barrel to Singapore quotes on Tuesday, as against a 24-cents discount a day earlier.

The March crack is higher at $ 15.35 /bbl with the 10 ppm crack at $16.30 /bbl. The regrade has dropped – $ 0.70 /bbl.

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

Fuel Oil

Fuel oil refining margins rebounded on Tuesday after sharp losses in crude oil prices late on Monday but sentiment continued to be weighed down by ample supplies as more arbitrage volumes are expected to arrive in Singapore in March.

The March 380-cst barge crack discount jumped to minus $3.65 a barrel to Brent crude, up from minus $4.61 a barrel in the previous session. The front-month crack discount on Monday was at its narrowest since Feb. 1. 

The March180 cst crack has jumped back sharply to $ 0.60 / bbl with the visco spread at $ 0.80 /bbl.

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

Hedge Recommendations

The sharp jump in FO cracks makes hedging Q2 attractive once again at + 0.20 /bbl. Also, there is a flare up in the 10ppm Gasoil crack for Cal20 taking it past $ 20/bbl. We shall therefore, lay on a another tranche for this crack.

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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