Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices slid about 1% on Monday as strong U.S. economic data had investors bracing for more interest rate hikes from the U.S. Federal Reserve to fight inflation, which could slow economic growth and oil demand.

London-traded Brent crude for April delivery was at $82.09 per barrel by 14:30 ET (19:30 GMT), down 73 cents, or 0.9%. The global oil benchmark also finished last week flat in pursuit of the notion that China would mount one of the most aggressive buying campaigns for crude with the end to COVID controls in the country.

New York-traded WTI for April delivery settled at $75.68 a barrel, down 64 cents or 0.8%. The U.S. oil benchmark finished last week almost flat at $76.32 on bets over impending Chinese demand despite humongous builds over nine straight weeks in crude stockpiles in the United States.

News that Russia halted exports to Poland via a key pipeline lent some support earlier in the session.

Adding to global oil demand worries, rising Sino-U.S. tensions hammered equity markets in China and Hong Kong while investors awaited policy signals from the upcoming National People’s Congress.

Asia’s naphtha markets rose by $6.37 to $118.80 a tonne and the backwardation stood at $19.50 per tonne.

The March crack is higher at -$1.40 per barrel

Asia’s gasoline refining profit margin extended gains on Monday, buoyed by firm Indonesian and Indian demand and tight Chinese supplies, traders said.

India’s demand for gasoline, used mainly in passenger vehicles, is expected to rise by 7.1% to 37.8 million tonnes in the next fiscal year beginning on April 1, initial government estimates showed.

The March crack is higher at $13.15 per barrel.

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

Asia’s 10 ppm sulphur gasoil margins opened the week firmer by 7% to $24.22 per barrel, compared with the previous close, as some buyers re-entered on hopes that the market had bottomed out.

Refining margins for 10 ppm sulphur gasoil closed the session at $22.69 per barrel, down by 29% month-on-month compared with January levels.

Cash differentials for 10 ppm sulphur gasoil went up to $1.19 per barrel, tracking the firmness in margins – even though a buy-sell gap was evident throughout the afternoon trading session.

Jet fuel refining margins rose by a slower pace to $22.22 per barrel, resulting in wider regrade values at a discount of $2 per barrel.

The March crack for 10 ppm Gasoil is higher at $25.60 /bbl. The 10 ppm regrade is at -$1.60 /bbl.

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

Asia’s spot fuel oil premiums were little changed in thin activity on Monday, while downstream bunkering premiums found a floor as demand improved slightly at the start of a new trading week.

Asia’s 0.5% VLSFO cash differential was down slightly from the previopus session at $5.60 a tonne on Monday.

Fuel oil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose 9% to 1.17 million tonnes in the week ended Feb. 23, latest data from Dutch consultancy Insights Global showed.

The March crack for 180 cst FO is higher at – $13.95 /bbl with the visco spread at $3.25 /bbl.

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

No fresh trade 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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