Oil markets recovered some of last week’s stunning loss triggered by panic over the Omicron variant of Covid after some said that the strain might be milder than thought, despite the World Health Organization reporting that it carried a very high risk of infection. Crude prices rose as much as 5% in Monday’s early trade after Friday’s dump of about 12%, which was the biggest one-day percentage loss in oil since April 2020. But by settlement, the day’s gains were less than 3% as larger concerns about the Omicron remained.
Brent crude futures settled at $73.44 a barrel, up 72 cents or 1%, having slid by $9.50 on Friday. In post-settlement trade, Brent briefly turned into negative territory on thin volumes.
WTI crude futures settled up $1.80, or 2.6% at $69.95 a barrel. The contract tumbled $10.24 in the previous session.
The WHO said the Omicron variant carried a very high risk of infection surges, prompting more countries to close borders and casting a shadow over economic recovery from the two-year pandemic. But some experts said the variant might prove to be milder than initially feared.
Asia’s naphtha crack rose to $149.98 per tonne from $143.33 in the previous session.
The December crack is higher at $ 4.25 /bbl.
Asia’s gasoline crack rose to $6.71 a barrel from $6.34 in the last session. However, the upside remained limited over concerns of surplus supply.
The December crack is higher at $7.95/ bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asian refining margins for 10 ppm gasoil rose on Monday, but stayed within close sight of a more than two-month low touched on Friday, amid renewed concerns over near-term demand due to the Omicron coronavirus variant.
Cash differentials for gasoil with 10 ppm sulphur content inched up by 2 cents to a premium of 25 cents per barrel to Singapore quotes.
Refining margins for 10 ppm gasoil climbed to $9.82 a barrel over Dubai crude during Asian trading hours, compared with Friday’s $9.45 per barrel, which was the lowest since Sept. 9.
Cash differentials for Jet dipped by 4 cents to a premium of 20 cents over Singapore quotes.
Some would-be travellers are considering cancelling or delaying trip plans in response to fresh curbs prompted by the Omicron variant of the coronavirus, travel agents said on Monday, threatening an already fragile recovery for the global tourism industry. Singapore, which had only recently begun a cautious reopening to foreign travel, on Sunday deferred plans to open its borders to vaccinated travellers from the United Arab Emirates, Qatar and Saudi Arabia, while India will make on-arrival COVID-19 testing mandatory for flyers from more than a dozen countries.
The December crack for 500 ppm Gasoil is higher $8.25/bbl with the 10 ppm crack at $ 9.55 /bbl. The regrade is at -$ 1.15 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s 0.5% very low-sulphur fuel oil (VLSFO) cash differential climbed to a near two-year high on Monday after eight straight sessions of gains amid concerns over tightening supplies.
The VLSFO cash premium jumped to $20.13 a tonne to Singapore quotes on Monday, up from $18.83 a tonne on Friday. The cash differential was last higher in early-February last year when the global sulphur cap came into effect at the start of 2020 and caused a global surge in VLSFO demand.
The December crack for 180 cst FO is lower at -$6.95 /bbl with the visco spread at $1.20 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No Fresh trades today. However, we would like to take the opportunity to highlight the reason for risk management today. We had some time ago recommened hedging gasoil cracks in excess of $15.00/barrel. Those who had done similar trades would be really grateful for their sagacity.
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.