Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose for a second day in a row on Wednesday after data showed weekly consumption of fuels in the United States offset builds in crude.

Brent crude futures settled up 33 cents, or 0.3%, at $105.32 a barrel.

WTI crude futures settled up 32 cents, or 0.3%, at $102.02 per barrel.

A soaring dollar, which makes oil more expensive for non-holders of the U.S. currency, capped the market’s gains. China’s grappling with new coronavirus cases also clouded the economic outlook for the world’s biggest importer of crude.

doe data

While crude stocks showed a small build, product stocks were drawn down. However, our material balance statements shows a build for product stocks as well.


All that notwithstanding, changes in demand for both gasoline and gasoil were more or less unchanged which seems to suggest that demand is getting capped at these sorts of prices.

At a global level, the death toll from the COVID-19 virus rose to 6.25 Million (+2,694 DoD) yesterday. The total number of active cases fell by 210,000 DoD to 40.23 million. (Click here for details).

No fresh news on the Naphtha markets.

The May crack is higher at -$ 0.90 per barrel 

Asia’s refining margins for gasoline climbed to a fresh peak on Wednesday, driven by robust demand from Indonesia and Malaysia. The gasoline crack rose to $22.07 a barrel, up 27 cents from the last close. In physical markets, Vitol and Trafigura purchased 50,000 barrels each of the benchmark 92-octane grade gasoline.

Light distillates stocks at Fujairah Oil Industry Zone fell 195,000 barrels to 3.749 million barrels in the week to April 25, according to industry information service S&P Global Commodity Insights.

The May crack is higher at $26.00 per barrel.

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

Asian refining profit margins for jet fuel rose for a third straight session on Wednesday, soaring to their strongest level on record, boosted by recovering aviation demand across the globe.

Refining profits, also known as cracks, for jet fuel climbed to a new record of $36.24 per barrel over Dubai crude during Asian trading hours, up from $31.93 per barrel a day earlier.

Cash premiums for jet fuel, however, inched down a cent to $1.19 a barrel to Singapore quotes on Wednesday, due to muted trading activity in the physical market.

The May/June time spread for jet fuel in Singapore widened its backwardation on Wednesday to trade at $4.25 a barrel, as against $3.60 per barrel in the previous session.

Meanwhile, refining margins for 10 ppm gasoil jumped to $46.59 per barrel over Dubai crude on Wednesday, their strongest level on record, according to Refinitiv Eikon data that goes back to 2014. The gasoil cracks were at $42.28 per barrel on Tuesday.

Middle-distillate inventories in the Fujairah Oil Industry Zone climbed 9% to a three-week high of 1.3 million barrels in the week ended April 25, data via S&P Global Commodity Insights showed.

The May crack for 500 ppm Gasoil is higher at $48.75 /bbl with the 10 ppm crack at $49.75 /bbl. The regrade is at -$10.00 /bbl.

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

Asia’s cash premiums for 0.5% very low-sulphur fuel oil (VLSFO) rose on Wednesday, supported by active buying interests for physical cargoes, while traders expect the regional market for the marine fuel grade to remain relatively tight in the near term.

The cash differentials for Asia’s 0.5% VLSFO climbed to a premium of $21.58 a tonne to Singapore quotes, compared with $21.21 per tonne on Tuesday.

The LSFO market has remained well supported this month by tight gasoil supply for the blending pool, resulting from improving demand as lockdowns eased, while arbitrage arrivals from the West were capped due to the Russian-Ukraine crisis, Refinitiv Oil Research analysts said in a note.

The front-month VLSFO crack rose to $21.39 per barrel against Dubai crude during Asian trade on Wednesday, compared with $20.40 a day earlier.

Meanwhile, the front-month barge crack for 380-cst HSFO traded at a discount of $12.03 a barrel to Brent on Wednesday, compared with minus $13.10 a barrel in the previous session.

Cash premiums for 380-cst high sulphur fuel oil (HSFO) rose to a premium of $28.37 per tonne to Singapore quotes, while cash differentials for 180-cst HSFO were at a premium of $36.57 per tonne to Singapore quotes.

The May crack for 180 cst FO is higher at $5.50 /bbl with the visco spread at $5.05 /bbl.

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

We shall lay on a tranche of 92 Unleaded Dubai for May at current levels of $ 26.00 / bbl. This will of course have to settle.

Refining margins are currently at never before levels. Would recommend doing serious hedging of the whole barrel really.

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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