Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices edged higher Wednesday after data showing strong drawdowns in both U.S. crude and stockpiles ahead of the long weekend that officially kicks off the country’s peak summer driving season.

Brent futures settled up 36 cents, or 0.5%, at $68.73. Brent gained 2.9% in the previous session.

WTI crude futures settled up 14 cents, or 0.2%, at $66.21.  WTI rose 3.9% in the previous session as investors bet on a spike in fuel demand ahead of the three-day break leading to Monday’s Memorial Day holiday.

The global oil deficit is now seen at about 1 MMB/D, Russia’s DPM said on Wednesday, days before the OPEC+ top negotiators are expected to meet.

Iran’s flagship crude grades could start to get marginally lighter in quality due to the fluctuating appetite of its Chinese customers, which are starting to favor lighter and more medium oil blends, according to market sources.

Doe data

Yesterday’s data statement was clearly bullish with greater than expected draws across the barrel. What makes this data even more credible is the demand numbers of gasoline (9.5 mbpd) and gasoil (4.5 mbpd).

The material balance statement too was not seriously off kilter which makes the data even more credible.

At a global level, the death toll from the COVID-19 virus rose to 3.51 Million (+12,342 DoD) yesterday. The total number of active cases rose fell by around 160,000 DoD to 14.75 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.

The naphtha crack NAF-SIN-CRK  per tonne a day earlier

Asia’s naphtha crack rose on Tuesday for a second straight session, while the gasoline crack dipped after a brief rebound.

Asia’s naphtha crack rose to was at $101.4 per tonne, compared with $99.7 per tonne a day earlier.

The June crack crack is higher at $ 0.45 /bbl

Asia’s gasoline crack fell to $6.32 per barrel, from $6.46 per barrel on Monday.

The June crack is lower at $8.10 /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 stayed unchanged at 18 cents per barrel to Singapore quotes.

Cash differentials for Jet widened their discounts to 37 cents per barrel to Singapore quotes, compared with a 30-cent discount a day earlier.

 IATA is forecasting that total air passenger numbers in 2021 will be 52% lower than they were in 2019, as restrictions continue to hamper travel, with passenger numbers expected to recover to 88% of pre-pandemic levels in 2022.

Global airlines have removed 6.9 million scheduled seats during this month due to lockdowns across various parts of the world, aviation data firm OAG said in a statement.

The June crack for 500 ppm Gasoil is lower at $6.55 /bbl with the 10 ppm crack at $ 8.35 /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) extended losses on Tuesday, hitting fresh multi-month lows.

The VLSFO cash differential slipped to a near nine-month low of minus $3 a tonne to Singapore quotes on Tuesday, while the differential for cargoes of 380-cst HSFO fell to a near 11-month low of minus $3.30 a tonne.

The front-month VLSFO crack against Dubai crude also fell to $9.56 a barrel, the lowest since Dec. 23, amid rising crude oil prices.

The June crack for 180 cst FO is higher at  -$7.10 /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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