Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose Monday, overcoming a choppy session, but the volatility of the past fortnight is unlikely to disappear at least until the end of this week’s OPEC+ meeting. 

Brent crude finished the session higher by 57 cents, or 0.9%, at $64.35.

WTI settled up 59 cents, or 1%, at $61.56. It tumbled as much 2.5% earlier in the day.

Saudi Arabia is prepared to support extending oil cuts by OPEC+ into May’21 and Jun’21 and is also ready to extend its own voluntary cuts to boost oil prices amid a new wave of coronavirus lockdowns. Russia would support broadly stable oil output by OPEC+ group of leading global oil producers in May’21, while seeking a relatively small output hike for itself to meet the rising seasonal demand, a source said on Monday.

Hedge funds and other money managers sold the equivalent of 88 MMB of petroleum futures and options in the week to 23 Mar’21, the fastest rate of selling since 3 Nov’21, according to exchange and regulatory data.

At a global level, the death toll from the COVID-19 virus rose to 2,803,988 (+7,507 DoD) yesterday. The total number of active cases fell by around 30,000 DoD to 21.99 million. (Click here for details)

Asia’s naphtha crack and arbitrage spread fell on Monday on reports that the massive container ship blocking Egypt’s Suez Canal for nearly a week had been partially refloated, easing concerns of supply disruptions to Asia.

The front-month naphtha arbitrage spread, the price difference between naphtha cargoes in Asia and Northwest Europe, fell to $15.25 a tonne on Monday, down from a more than four-month high of $20 a tonne touched on Friday, Refinitiv data in Eikon showed.

The naphtha crack dropped to a near two-week low of $97.55 a tonne on Monday, down from a near two-week high of $108.90 per tonne on Friday.

The April crack is lower at $0.25 /bbl

Asia’s gasoline crack climbed to a two-week high of $6.31 a barrel on Monday, lifted by signs of tightening inventories amid regional refiner turnarounds and a refinery outage in Indonesia that could boost near term exports to the country.

Indonesian state oil company Pertamina said on Monday it hoped to restore operations at its Balongan oil refinery in West Java in four or five days, as firefighters worked to extinguish a massive blaze that broke out overnight, injuring five people.

The April crack is higher at $8.15 /bbl.

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

Cash differentials for 10 ppm gasoil were at a discount of 27 cents per barrel to Singapore quotes, compared with a 28-cent discount on Friday.

China’s diesel exports in March are expected to be around 1.6 million-1.7 million tonnes, likely exceeding the export volumes from last month, while India’s March-loading diesel exports were seen at around 1.8 million-1.9 million tonnes, Refinitiv Oil Research assessments showed.

Cash differentials for jet kero narrowed by a cent to a discount of 54 cents per barrel to Singapore quotes on Monday.

Global scheduled airline capacity has increased 3.9% WoW to 62.1 million seats for the week starting 29 Mar’21, driven by Europe and Southeast Asia gains, although seat capacity was still 58.2% lower YoY, according to OAG.

The April crack for 500 ppm Gasoil is lower at $3.60 /bbl with the 10 ppm crack at $ 4.60 / bbl. The regrade is at -$ 1.35 /bbl. 

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

Asia’s front-month time spreads for 0.5% very low-sulphur fuel oil (VLSFO) and both grades of high-sulphur fuel oil (HSFO) retreated on Monday, on reports that the massive container ship blocking Egypt’s Suez Canal for nearly a week had been partially refloated, easing concerns of supply disruptions to Asia.

The April/May VLSFO time spread fell 50 cents a tonne on Monday, down from $1 a tonne on Friday, according to Refinitiv data in Eikon.

Similarly, the 180-cst and 380-cst HSFO front-month time spreads each fell 50 cents from the previous session to $1.75 a tonne and $2 a tonne on Monday, respectively, according to the Refinitiv data

The April crack for 180 cst FO is lower at  -$4.20 /bbl with the visco spread at $0.90 /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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