Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices climbed to highs last seen in October 2018 on Monday as the United States and Iran wrangled over the revival of a nuclear deal, delaying a surge in Iranian oil exports, while investors eyed the outcome of the OPEC+ meeting this week.

Brent Crude hit its highest since 2018, at $76.20 per barrel, before finishing the session at $76.18, up 62 cents or 0.8%. Brent did a final pre-weekend trade of $76.12. For the week, Brent rose 3.6%. For the year, it is up 47%.

WTI crude also soared to as high as $74.25 per barrel, a peak not seen since 2018, before settling the session at $74.05 and doing a final pre-weekend trade of $74. While the rise on the day was just 75 cents or 1%, WTI gained 3% on the week. For the year, WTI shows an uptick of 52%.

Nigeria’s NNPC raised the OSPs for all but one of its crude oil grades loading in Jul’21, as OSPs saw broad increases two months in a row following the 11-month lows seen for May’21 OSPs.

US energy firms cut 1 oil rig to total 372 (+184 YoY), the highest since Apr’20, according to Baker Hughes. The oil rig count gained 13 in Jun’21, its 10th monthly rise and increased 48 in 2Q’21, its third consecutive quarterly rise.

Hedge funds and other money managers cut their net long US crude futures and options positions by 6,135 contracts to 427,836 in the week ending 22 Jun’21, the US CFTC said on Friday.

At a global level, the death toll from the COVID-19 virus rose to 3.94 Million (+5,960 DoD) yesterday. The total number of active cases rose rose by around 5,000 DoD to 11.55 million. (Click here for details).

Malaysia will extend a national lockdown beyond Monday to curb the spread of COVID-19, Bernama reported on Sunday, citing the Malaysian PM, who added that measures will not be eased until daily cases fell below 4,000.

Australia reported on Sunday one of the highest numbers for locally acquired coronavirus cases this year, triggering lockdowns in the cities of Sydney and Darwin and forcing tighter restrictions in four states.

Indonesia recorded its biggest daily increase in coronavirus infections with 21,342 cases on Sunday, taking the total tally to 2,115,304, according to data from the country’s COVID-19 task force.

Asia’s naphtha crack climbed to $102.10 per tonne on Friday, up from $97.38 per tonne a day earlier. The naphtha crack has jumped 13.4% this week.

The July crack is unchanged at $0.70 / bbl

Asia’s gasoline crack climbed to its strongest level in more than six weeks on Friday, buoyed by tighter supplies and hopes of a gradual recovery in transportation demand as countries ease COVID-19 restrictions.

The gasoline crack rose 39 cents to $6.67 per barrel on Friday, a level not seen since May 10. The crack has gained about 29% this week.

ARA Gasoline inventories fell 4.2% to 934,000 tonnes in the week to June 24, data from Dutch consultancy Insights Global showed. 

The July crack is lower at 9.10 / bbl

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

Cash differentials for gasoil with 10 ppm sulphur content dropped 2 cents to a discount of 8 cents per barrel to Singapore quotes on Friday.

ARA gasoil inventories rose 3.5% to 2.5 million tonnes in the week ended June 24, data from Dutch consultancy Insights Global showed.

Cash differentials for jet fuel were at a discount of 50 cents per barrel, the widest since June 4.

Although the aviation market is getting some support from summer travel demand in western countries, the ongoing border restrictions in Asia and limited scopes for international flights globally will keep hurting jet fuel margins well into 2022, market watchers said.

The July crack for 500 ppm Gasoil is lower at $5.95 /bbl with the 10 ppm crack at $ 7.95 /bbl. The regrade is at -$ 0.40 /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 firmed on Friday, climbing to a more than one-week high of $11.71 a barrel above Dubai crude following five straight sessions of narrow losses previously, Refinitiv data in Eikon showed.

The refining margin was up by 30 cents a barrel from Thursday but remained firmly within a tight trading range of $11 to $12 over the past three weeks as participants look for signs of drawing supplies or improved bunkering demand.

ARA fuel oil stocks rose 1%, or 20,000 tonnes to an eight week high of 1.51 million tonnes in the week ended June 24, data from Dutch consultancy Insights Global (IG) showed. Compared with last year, however, the inventories at the ARA hub were 1% lower and were well above the five-year seasonal average of 1.29 million tonnes

The June crack for 180 cst FO is lower at  -$5.35 /bbl with the visco spread at $1.10 /bbl.

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

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.

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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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