Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose for a third week in a row to a near three-year high on Friday as global output disruptions have forced energy companies to pull large amounts of crude out of inventories.

Brent crude settled up 84 cents, or 1.1%, at $78.09. For the week, Brent gained 3.7%. WTI crude settled up 68 cents, or 0.9%, at $73.98 per barrel. For the week, WTI rose 2.8%.

That was the highest close for Brent since October 2018 and for WTI since July 2021, both for a second day in a row.

It was the third week of gains for Brent and the fifth for WTI mostly due to U.S. Gulf Coast output disruptions from Hurricane Ida in late August.

India’s crude imports rose to a three-month peak in August, rebounding from July’s near one-year low.

China’s first public sale of state oil reserves capped crude price gains. PetroChina and Hengli Petrochemical bought four cargoes totaling about 4.43 million barrels, sources said.

Iran, which wants to export more oil, said it will return to talks on resuming compliance with the 2015 Iran nuclear deal “very soon”, but gave no specific date.

In the United States, drillers added 10 oil rigs this week, putting the oil and gas rig count up for a 14th month in a row. The number of active oil rigs in the US now stands at 421, according to the energy services firm Baker-Hughes.


At a global level, the death toll from the COVID-19 virus rose to 4.76 Million (+4,901 DoD) yesterday. The total number of active cases fell by 20,000 DoD to 18.62 million. (Click here for details).

Asia’s naphtha crack eased and registered a weekly loss as crude oil prices hit a two-month high of $77.50 a barrel.

The refining margin declined to $135.08 a tonne from $136.03 in the previous session. However, the downside remained limited as stocks at Europe’s ARA hub fell to 267,000 tonnes in the week to Sept. 22 from prior week’s 299,000 tonnes.

The October crack is higher at $4.00 / bbl.

Asia’s gasoline crack eased on Friday for a second straight day after data showed a rise of 7.4% in European stocks last week.

The crack slipped to $7.46 a barrel from $7.57 in the last session.

Weighing on demand sentiment, gasoline stocks held at ARA refining and storage area increased to 813,000 tonnes on slower flows along the Rhine river, and amid congestion on barges in Amsterdam, data from Dutch consultancy Insights Global showed.

Asian exports in September are expected to close below 4 million metric tonnes (mt) for a second consecutive month, with a steep decline in India’s exports and lower-than-usual outflows from China, according to assessments by Refinitiv Oil Research.

The October crack is lower at $9.00 / bbl.


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

Asian refining margins for 10 ppm gasoil climbed for a fourth consecutive session on Friday, posting a second straight weekly gain, riding on tighter supplies amid lower Chinese exports in the spot market and steady arbitrage shipments to the West.

Cash differentials for gasoil with 10 ppm sulphur dipped 3 cents to 45 cents per barrel to Singapore quotes on Friday.

Refining margins or cracks for 10 ppm gasoil jumped to $11.24 per barrel over Dubai crude during Asian trading hours, a fresh high since March-end last year. They were at $10.85 per barrel a day earlier.

Gasoil stocks held independently in ARA dropped 5.7% to about 2 million tonnes in the week ended Sept. 23, according to Dutch consultancy Insights Global. ARA jet fuel inventories fell 14.7% this week to 879,000 tonne.

Asia’s cash differentials for jet fuel were at a premium of 11 cents per barrel to Singapore quotes, up from 4 cents per barrel on Thursday.

Jet fuel cracks surged to $9.16 per barrel over Dubai crude during Asian trading hours, the strongest since March 2020. The cracks were at $8.57 per barrel in the previous session.

The October crack for 500 ppm Gasoil is higher at $9.95 /bbl with the 10 ppm crack at $ 11.45 /bbl. The regrade is at -$ 0.35 /bbl. 

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

Asia’s fuel oil markets fell on Friday, with time spreads for both 0.5% very low-sulphur fuel oil (VLSFO) and high-sulphur fuel oil (HSFO) retreating further from recent highs.

The drop in front-month spreads was most pronounced in the HSFO market with 180-cst HSFO dropping to a more than one-month low of $7.75 a tonne and 380-cst HSFO falling to a three-week low of $8.75 a tonne, Refinitiv data showed.

The HSFO viscosity spread also tumbled to more than two-week low of $13.50 a tonne on Friday after hitting a record high of $25.25 on Monday, Refinitiv data showed. 

Fuel oil stocks in the ARA rose by 98,000 tonnes to a five-week high of 1.22 million tonnes in the week ended Sept. 23, data from Dutch consultancy Insights Global (IG) showed.

The October crack for 180 cst FO is lower at  -$1.40 /bbl with the visco spread at $2.70 /bbl.

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

No fresh trades 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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