Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

After being stifled lately by the strong dollar and China’s Covid problems and related lockdowns, crude got a full green signal on Thursday from a Wall Street Journal report that Berlin was no longer opposed to an embargo on Russian oil — a dynamic that could further tighten supplies in the already-stressed global energy market.

Brent crude futures settled up $2.27, or 2.2%, at $107.59 a barrel.

WTI crude futures settled up $3.34, or 3.3%, at $105.36 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.

At a global level, the death toll from the COVID-19 virus rose to 6.26 Million (+2,561 DoD) yesterday. The total number of active cases fell by 240,000 DoD to 39.99 million. (Click here for details).

No fresh news on the Naphtha markets.

The May crack is lower at -$ 1.25 per barrel 

Asia’s refining margins for gasoline extended gains on Thursday and scaled a new high due to increased Ramadan consumption in Indonesia and Malaysia amid tight global supplies. The crack rose to $22.28 a barrel up from $22.07 in the previous session.

Gains were capped after inventories of light distillates at the key trading hub of Singapore climbed 268​,000 barrel to 13.266 million barrels in the week to April 27, official data showed.

The May crack is lower at $23.35 per barrel.

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

Asian refining profits for 10 ppm gasoil climbed for a fourth consecutive session on Thursday, soaring to an all-time high, riding on firmer industrial and transportation demand amid tighter supplies.

Refining margins, also known as cracks, for 10 ppm gasoil jumped to $47.53 a barrel over Dubai crude during Asian trading hours, the strongest level on record, according to Refinitiv Eikon data that goes back to 2014.

The gasoil cracks were at $46.59 per barrel on Wednesday, and have gained nearly 15% in the last two weeks, Refinitiv data showed.

Cash differentials for gasoil with 10 ppm sulphur content were at a premium of $7.67 a barrel to Singapore quotes.

Cash premiums for jet fuel rose to $1.37 a barrel to Singapore quotes on Thursday.

Jet fuel refining margins also soared to a new all-time high of $37.38 per barrel over Dubai crude on Thursday, up from $36.24 per barrel a day earlier.

Singapore’s middle distillate inventories dropped 21.9% to a three-week low of 7.04 million barrels in the week to April 27, according to Enterprise Singapore data. This week’s onshore stocks were about 45% lower compared with the corresponding week a year earlier.

The May crack for 500 ppm Gasoil is lower at $47.45 /bbl with the 10 ppm crack at $48.45 /bbl. The regrade is at -$9.00 /bbl.

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

Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) rose on Thursday, climbing to their strongest level in more than a week on tight regional supplies. The VLSFO crack for May climbed to $21.65 per barrel against Dubai crude during Asian trading hours, the highest since April 19. The crack was at $21.39 per barrel on Wednesday.

Cash premiums for Asia’s 0.5% VLSFO, however, fell to $19.45 a tonne to Singapore quotes, from $21.58 per tonne a day earlier.

Meanwhile, Asia’s cash premiums for 380-cst high sulphur fuel oil (HSFO) were at $28.73 per tonne to Singapore quotes, as against a premium of $28.37 per tonne in the previous session.

Singapore’s onshore fuel oil stocks fell 17.1% to a seven-month low of 19.1 million barrels, or about 2.9 million tonnes, in the week to April 27, according to the Enterprise Singapore data.

The onshore fuel oil inventories were 22% lower compared with year-ago levels. 

The May crack for 180 cst FO is lower at $5.35 /bbl with the visco spread at $6.15 /bbl.

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

While we expected the tranche of 92 Unleaded Dubai for May we put on yesterday to have to settle, it actually went straight into the money. Whether it is because product margins are peaking or standard volatility remains to be seen.

Today we shall hedge Gasoil 10 ppm Dubai for June 22 and Cal 23 at current levels of $ 42.15 / bbl and $21.00 /bbl.

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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