Crude OilNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices dipped for a second straight day on Tuesday as a surge in the Delta variant of Covid continued to pose headwinds for the market.

Brent Crude futures slipped 2 cents to settle at $74.48 per barrel. WTI crude futures settled down 26 cents, or 0.4%, at $71.65 per barrel.

Losses in oil were muted by expectations that the API, or American Petroleum Institute, will issue market-friendly inventory data later in the day.

The premium of the Brent front-month over WTI rose to its highest since May.

Api data

Data released by the API was bullish with significant draws across the board, some much higher than expectations. We will await the official DOE data to be released later today.


At a global level, the death toll from the COVID-19 virus rose to 4.19 Million (+9,460 DoD) yesterday. The total number of active cases rose by 130,000 DoD to 14.12 million. (Click here for details).

Britain reported its highest number of deaths and people in hospital with coronavirus since March. The U.S. Centers for Disease Control and Prevention (CDC) was set to recommend fully vaccinated Americans wear masks indoors in some instances, sources said. Olympic host city Tokyo was on track to report a record number of coronavirus cases even as athletes continued to compete.


Asia’s naphtha market held firm on Tuesday, with cracks hitting a five-year high, as more buyers emerged seeking cargoes for first-half September delivery.

Asia’s naphtha crack slipped to $142.15 per tonne on Tuesday, a fresh five year high. The crack settled at 138.05 on Monday.

Traders said that light naphtha supplies from the United States remained limited even as overall western supplies to arrive in August are expected to be above the monthly average of 2 million tonnes.

The August crack is higher at $3.85 / bbl

Asia’s gasoline crack  dipped back to $8.77 per barrel on Tuesday, compared with $8.94 per barrel on Monday.

The August crack is higher at $11.50 / bbl

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

Cash differentials for gasoil with 10 ppm sulphur content were a cent lower at a premium of 3 cents per barrel on Tuesday.

Cash differentials for jet fuel  were 10 cents lower at a discount of 18 cents per barrel to Singapore quotes, while the Aug/Sept time spread for the aviation fuel in Singapore traded at minus 17 cents per barrel on Tuesday.

Asian refining margins for jet fuel dropped for a fourth consecutive session on Tuesday, sliding to their weakest level in nearly a month, weighed down by persistent weakness in regional aviation demand as Southeast Asia battles the infectious Delta variant of the coronavirus.

The Jet crack slumped to $5.42 per barrel over Dubai crude during Asian trading hours, their lowest since June 30. It was at $5.70 per barrel a day earlier. 

The August crack for 500 ppm Gasoil is lower at $6.50 /bbl with the 10 ppm crack at $ 7.85 /bbl. The regrade is at -$ 0.90 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) front-month crack extended losses on Tuesday, falling for a fourth straight session, as crude oil prices rose.

The front-month VLSFO crack slipped to a near two-month low of $11.27 a barrel above Dubai crude, down from $12.10 at the start of the previous week, Refinitiv data on eikon showed.

Despite the lower crack values, the near term VLSFO market’s supply outlook remains somewhere between tight to balanced, trade sources said.

The August crack for 180 cst FO is lower at  -$6.15 /bbl with the visco spread at $1.65 /bbl.

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

No fresh action 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.

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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