Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices fell on Tuesday as a rout in Wall Street stocks weighed on sentiment in a heavily-overbought market.

Brent crude the global benchmark for oil, settled down 44 cents, or 0.6%, at $79.09 per barrel. U.S. crude futures settled down 16 cents, or 0.2%, at $75.29 per barrel.

Before the rally ran out of steam, however, Brent topped $80 per barrel for the first time in nearly three years, hitting a high of $80.75.

The market also faces headwinds from a power crunch in China, the world’s biggest energy consumer.

Britain threw refiner Essar Oil UK a lifeline on Tuesday with a phased tax payment deal, allowing it to keep producing just as the country struggles with motorists draining petrol stations in a panic-driven buying frenzy.

api data

The API data would add more impetus to the pullback as the builds across the board were totally against market expectations. We will await the official data today for corroboration of the same. 


At a global level, the death toll from the COVID-19 virus rose to 4.78 Million (+7,924 DoD) yesterday. The total number of active cases fell by 110,000 DoD to 18.41 million. (Click here for details).

Asia’s naphtha crack weakened as crude oil prices crossed $80 a barrel on tighter supply. The crack eased to $132.43 a tonne from $135.33 in the previous session.

On supply side, total naphtha flows into Asia for September are expected to close at a 16-month high of about 6.8 million, data from Refinitiv Eikon showed.

The October crack is lower at $3.30 / bbl.

Asia’s gasoline crack extended losses on Tuesday after analysts predicted a build up in U.S. inventories in the week to Sept. 27. The crack weakened to $6.54 a barrel, hitting a two-week low, from $6.73 in the previous session. However, demand for the benchmark 92-octane grade stayed firm, lifting prices at the trading window.

The October crack is higher at $8.90 / bbl.


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

Cash differentials for gasoil with 10 ppm sulphur dipped to 44 cents per barrel to Singapore quotes, down 2 cents from Monday.

Asia’s jet fuel cash differentials flipped back to a narrow discount on Tuesday amid muted buying interests in the physical market, while near-term outlook for the aviation fuel remained clouded as airlines continued to trim capacity for the remainder of the year.

Asia’s cash differentials for jet fuel were at a discount of 4 cents per barrel to Singapore quotes, compared with a premium of 5 cents per barrel a day earlier.

Refining margins or cracks for jet fuel dipped to $9.26 per barrel over Dubai crude during Asian trading hours on Tuesday, down from a multi-month peak of $9.81 per barrel hit in the previous session.

Airlines across the world reduced their scheduled capacity for October to December by 11.8 million seats this week, while September capacity was 2% below the levels in August, according to aviation data firm OAG.

The October crack for 500 ppm Gasoil is higher at $10.35 /bbl with the 10 ppm crack at $ 11.85 /bbl. The regrade is at -$ 0.65 /bbl. 

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

Asia’s residual fuel oil markets extended losses on Tuesday, on a more balanced near-term demand and supply outlook.

Cargo cash premiums and front-month backwardation for both 180-cst and 380-cst high-sulphur fuel oil (HSFO), as well as those for 0.5% very low-sulphur fuel oil (VLSFO), were lower.

The HSFO viscosity spread also tumbled to more than two-week low of $13.50 a tonne on Friday after hitting a record high of $25.25 on Monday, Refinitiv data showed. 

Fuel oil stocks in the ARA rose by 98,000 tonnes to a five-week high of 1.22 million tonnes in the week ended Sept. 23, data from Dutch consultancy Insights Global (IG) showed.

The October crack for 180 cst FO is higher at  -$1.65 /bbl with the visco spread at $2.40 /bbl.

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

No fresh trades 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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