Crude Oil

Crude oil prices moved hesitantly as markets continued to be unsure about the pace of vaccine rollout.

Brent futures settled 9 cents lower at $55.81 a barrel. WTIs future settled 24 cents higher at $52.85 per barrel.

The IMF warned that vaccine shortages may delay the economic recovery leading to financial instability.

The Federal Reserve left its key overnight interest rate near zero and made no change  to its monthly bond purchases, pledging again to keep those economic pillars in place until there is a full rebound from the pandemic-triggered recession.

doe changes

The DOE reported a huge draw in crude stocks caused primarily by a dramatic drop of 2 mbpd in net imports. While a build was reported in gasoline, distillates also reported a small draw.

As a matter of fact, as per our material balance statement, all draws seem to be higher than reported. Even gasoline stocks should have drawn.

covid 19 

At a global level, the death toll from the COVID-19 virus rose to 2,182,433 (+16,852 DoD) yesterday. The total number of active cases rose by around 100,000 DoD to 25.92 million DoD. (Click here for details). 


Asia’s naphtha crack dropped to $ 97.00 per tonne on Wednesday from $ 98.85 per tonne on Tuesday.

The February crack is higher at  $2.25 /bbl.


Asia’s gasoline crack climbed to $4.07 per barrel on Wednesday, a level not seen since Oct. 8. It was at $3.85 per barrel a day earlier.

Light-distillate inventories in the Fujairah Oil Industry Zone rose 5.7% to 7.3 million barrels in the week ended Jan. 25, data via S&P Global Platts showed. The weekly stocks in Fujairah have averaged 7.2 million barrels so far this year, and this week’s inventories were about 2.2% higher compared with the same period a year earlier.

The February crack is higher at $5.25 /bbl.

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


Asia’s cash differentials for jet fuel weakened on Wednesday, amid muted buying interest in the physical trade window, while refining profit margins for the aviation fuel dropped on firmer feedstock crude prices. Cash discounts for jet fuel widened by a cent to 27 cents per barrel to Singapore quotes on Wednesday.

Traders were concerned the already-battered aviation market would be likely to remain under pressure in the near-term as several countries have tightened border restrictions and renewed travel bans to contain the pandemic.

Airline bookings made as of Jan. 19 for Lunar New Year travel have plunged 73.7% compared with the holiday period in 2019, according to data from travel analytics firm ForwardKeys provided to Reuters.

Middle-distillate inventories in the Fujairah Oil Industry Zone climbed 16% to 4.5 million barrels in the week ended Jan. 25, data via S&P Global Platts showed. The weekly stocks in Fujairah have averaged 4.3 million barrels so far this year, compared with weekly averages of 4.2 million barrels in 2020, and 2.4 million barrels in 2019.

The February crack for 500 ppm Gasoil is marginally higher at $5.00 /bbl with the 10 ppm crack at $ 5.85 / bbl. The regrade is at   -$ 1.60 /bbl. 

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

Fuel Oil

Cash premiums for cargoes of Asia’s 0.5% very low-sulphur fuel oil (VLSFO) fell from an 11-month high hit in the previous session, amid a weak deal value in the Singapore window on Wednesday, falling to a two-session low of $4.78 a tonne to Singapore quotes. 

By contrast, the front-month VLSFO crack versus Dubai crude extended gains, climbing to $12.73 a barrel, according to Refinitiv data, amid a relatively tight near term supply outlook due to limited refinery output.

Fuel oil inventories in the Fujairah bunkering and storage hub dropped 12% to an eight-week low of 9.995 million barrels in the week ended Jan. 25, official data showed. Fujairah’s fuel oil inventories were 4% lower than year-ago levels.

The January crack for 180 cst FO is higher at  -$2.80 /bbl with the visco spread at $0.75 /bbl.

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

Hedge Recommendations

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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