Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices fell on Thursday, extending losses after official figures showed an unexpected rise in inventories in the United States although prices seem to have stabilised following a recent run of gains.

Brent crude settled at $78.25 a barrel, down 45 cents, 0.6%. It reached a peak of $78.72 earlier, after an overnight bottom of $76.77. WTI crude settled down 46 cents, or 0.6%, at $74.83 per barrel. It hit a session high of $75.79 after the EIA data, versus the overnight low of $73.73.

DOE data

The DOE data corroborated the crude build reported by the API. However, the rise in products was very small. Crude production has returned to pre hurricane Ida levels at 11.1 mbpd contributing significantly to the build in crude stocks. On the products side, the gasoline demand also returned back to healthier levels suggesting, according to our material balance statement, a draw in stocks.


The build in distillate stocks, however, seems to be understated as demand for distillates fell by 450 kbpd. 

At a global level, the death toll from the COVID-19 virus rose to 4.79 Million (+8,807 DoD) yesterday. The total number of active cases fell by 20,000 DoD to 18.39 million. (Click here for details).

Asia’s naphtha crack came under pressure with the build up in Fujairah stocks, while the prompt inter-month spread narrowed to $6.50 in backwardation.

The crack slipped to $130.68 a tonne, the lowest since Sept. 14, from $132.43 on the previous day.

The October crack is higher at $3.70 / bbl.

Asia’s gasoline crack slipped for a fourth consecutive session on Wednesday, after U.S. and Middle East inventories rose last week.

The crack slipped to $6.42 a barrel from $6.54 in the previous session. The price for the benchmark grade gasoline also weakened at the trading window, although demand stayed firm.

Stocks of light distillates at Fujairah Oil Industry Zone, including gasoline and naphtha, also increased by 154,000 barrels or 3.1% on the week to 5.111 million barrels.

The October crack is higher at $9.90 / bbl.


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

Asian refining margins for 10 ppm gasoil rose to their strongest level in 1-1/2 years on Wednesday, partly riding on weaker feedstock crude prices, while cash premiums for the industrial fuel grade surged to their highest since July last year.

Cash differentials for gasoil with 10 ppm sulphur rose to 53 cents per barrel to Singapore quotes, while the Oct/Nov time spread for the benchmark gasoil grade in Singapore remained in backwardation to also trade at 53 cents per barrel on Wednesday.

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.

Refining margins, also known as cracks, for 10 ppm gasoil jumped to $12.10 per barrel over Dubai crude during Asian trading hours, a fresh peak since March last year. They were at $11.51 per barrel a day earlier.

Asia’s cash differentials for jet fuel turned to a premium of 7 cents per barrel to Singapore quotes on Wednesday, thanks to a firmer deal in the physical trade window. They were at a discount of 4 cents per barrel on Tuesday.

The October crack for 500 ppm Gasoil is lower at $10.30 /bbl with the 10 ppm crack at $ 11.80 /bbl. The regrade is at -$ 0.45 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) snapped declines on Wednesday, rebounding from multi-month lows hit in the previous sessions when expectations of rising arbitrage supplies weighed on prices.

The front-month time spread climbed to $2.50 a tonne on Wednesday, up from a near three-month low of $1.75 on Tuesday, Refinitiv data in Eikon showed.

Similarly, the front-month crack rebounded to $11.74 a barrel above Dubai crude, from Tuesday’s four-month low of $10.68 a barrel, the Refinitiv data further showed.

Fuel oil inventories in the Fujairah bunkering and storage hub fell 4% to a near three-year low in the week ended Sept. 27, data released on Wednesday showed. They fell by 256,000 barrels, or about 40,000 tonnes, to 6.72 million barrels, or 1.06 million tonnes, data via S&P Global Platts showed. This is 

The October crack for 180 cst FO is higher at  -$1.00 /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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