Crude Oil

Oil prices fell over 3% on Tuesday to their lowest in two weeks on worries as Europe and the United States grappled with a surge in new coronavirus infections.

On its second to last day as the front-month, Brent futures for November delivery fell $1.40 to settle at $41.03 a barrel, while the more active Brent contract for December fell 3.1% to settle at $41.56. WTI crude fell $1.31 to settle at $39.29 per barrel.

Libya’s crude oil production has more than doubled in the past week, pumping just over 250 KB/D as oil fields in the east have resumed production. Libya’s Sarir oilfield, which was last producing 300 KB/D in 2019, has also restarted production.

Argentina’s oil production fell 9% YoY in Aug’20 to 472 KB/D, as lockdown for the coronavirus pandemic hurt demand. The lockdown has been extended several times to a latest proposed end date of 11 Oct’20, keeping a lid on sales of refined products..

China’s factory activity expanded at a faster pace in Sep’20, with the official manufacturing PMI rising to 51.5 in Sep’20 from 51.0 in Aug’20, thanks to a return to exports growth after several months of shrinking sales.

Japan’s factory output rose for the third straight month in Aug’20, growing 1.7% MoM, boosted by rebounding production of automobiles and car parts as well as iron, steel and non-ferrous metals.

covid 19

At a global level, the death toll from the COVID-19 virus rose to 1,012,01 (+5,853 DoD) yesterday. After several consecutive days of rise, the total number of active cases rose by around 16,000 over the weekend to 7. 68 million.  (Click here for details).


Asia’s naphtha crack fell 6.3% to a three-session low of $86.70 a tonne on Tuesday.

This came a day after South Korea’s Lotte Chemical had paid a premium of about $3 to $4 a tonne to Japan quotes on a cost-and-freight (C&F) basis for naphtha scheduled for first-half November delivery. This contrasted with the discount it had paid in August for naphtha scheduled for first-half October delivery as current market fundamentals have improved. 

The October crack is lower at $ 2.15 / bbl. 


Asia’s gasoline premium to Brent crude declined 7.3% to a two-day low of $5.41 a barrel.

In Europe, gasoline and gasoline components being shipped to the United States were seen at around 750,000 tonnes so far in September, the lowest level in the last four months..

 The October crack is lower at $ 4.80 / bbl

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


Asia’s cash differentials for jet fuel climbed to their strongest in a month on Tuesday, buoyed by hopes that the regional aviation sector would likely find some support from a slow but gradual increase in the number of operating flights in the coming weeks.

Cash discounts for jet fuel narrowed by 5 cents to 95 cents a barrel to Singapore quotes on Tuesday, a level not seen since Aug. 27.

The jet cracks are expected to find some support once winter heating demand for kerosene gathers pace, especially as some weather forecast models are projecting cooler-than-usual winter temperatures in Japan this year.

Full-year passenger traffic is set to decline 66%, the IATA said, compared with a previously forecast 63% decline , after a small summer rebound evaporated amid renewed coronavirus outbreaks and travel restrictions.

Russia’s exports of ultra-low sulphur diesel (ULSD) from the Baltic Sea port of Primorsk are set to fall by 27.3% month-on-month on a daily basis in October to 0.953 million tonnes from 1.268 million tonnes in revised schedule for September due to refineries maintenance.

The October crack for 500 ppm Gasoil is lower at $1.90 /bbl with the 10 ppm crack at $ 2.70 / bbl. The regrade is at   -$ 1.70 /bbl. For the first time in months, the Jet crack has moved into positive territory!

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

Fuel Oil

Asia’s 380-cst HSFO cash differential fell to a more than three-week low on Tuesday. The 380-cst HSFO cash premium slipped to 54 cents a tonne to Singapore quotes, down from 86 cents in the previous session and its lowest since Sept. 3.

The October crack for 180 cst FO is higher at – $2.40 /bbl with the visco spread at $0.95 /bbl.

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

Hedge Recommendations

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.

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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