Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices rose for a third straight day on Monday but settled slightly off their highs as Hurricane Ida’s influence on U.S. energy installations weakened after making an initial powerful landfall.

Brent Crude futures settled at $73.41, up 71 cents per barrel, or almost 1%. The session peak was $73.53.

U.S. West Texas Intermediate oil settled at $69.21 per barrel, up 47 cents, or 0.7%. It hit 69.34 at the session highs.

Oil’s highs for the day were also limited by reports that producer group OPEC+ was going ahead with a planned production hike for September despite a recent resurgence of Covid cases across the world that could once again weigh on energy demand.

China’s businesses and the broader economy came under increasing pressure last month as factory activity expanded at a slower pace while the services sector slumped into contraction, hurt by coronavirus-related restrictions and high raw material prices. The official manufacturing Purchasing Manager’s Index (PMI) was 50.1 in August from 50.4 in July, data from the National Bureau of Statistics (NBS) showed on Tuesday. The official non-manufacturing PMI in August was 47.5, well down from July’s 53.3, data from the National Bureau of Statistics (NBS) showed.

At a global level, the death toll from the COVID-19 virus rose to 4.52 Million (+7,512 DoD) yesterday. The total number of active cases rose by 20,000 DoD to 18.62 million. (Click here for details).

Asia’s naphtha crack edged slightly higher after crude oil prices slipped from a four-week high as Hurricane Ida weakened.

The crack rose to $119.95 a tonne from $118.80 in the previous session.

Naphtha stocks at ARA refining and storage area increased to 380,000 tonnes in the week to Aug. 26 from 336,000 last week.

The September crack is higher at $3.75 / bbl.

Asia’s gasoline crack inched up on Monday but remained below $7 a barrel for a second straight session after tepid demand recovery due to COVID-19 outweighed supply disruption worries triggered by Hurricane Ida.

The crack was at $6.66 a barrel, up from $6.56 on Friday.

The September crack is unchanged at $9.45 / bbl.


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

Cash differentials for gasoil with 10 ppm sulphur inched lower by a cent to a premium of 9 cents per barrel to Singapore quotes on Monday.

Asian refining profit margins for 10 ppm gasoil dipped on Monday, weighed down by lacklustre regional demand, but traders were hopeful arbitrage demand from Europe would cap any major downside in the near term. Despite weaker raw material crude prices, refining margins for 10 ppm gasoil fell 10 cents to $8.90 per barrel over Dubai crude during Asian trading hours.

With the gasoil EFS trading around -$34 / MT on Monday, the arbitrage to the west should be workable.

Cash differentials for jet fuel flipped to a discount of 11 cents per barrel to Singapore quotes yesterday.

The September crack for 500 ppm Gasoil is lower at $7.30 /bbl with the 10 ppm crack at $ 8.80 /bbl. The regrade is at -$ 0.80 /bbl. 

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

Asia’s front-month high-sulphur fuel oil (HSFO) time spreads firmed on Monday, climbing to near a two-year high as supply constraints and strong demand continue to fuel bullish sentiment.

The front-month 180-cst HSFO tome spread climbed to $16.25 a tonne while the 380-cst HSFO spread hit $13.75 a tonne, Refinitiv data in Eikon showed.

In the physical markets, the 180-cst HSFO cargo premium fell to $13.44 a tonne to Singapore quotes, down from a near eight-month high of $20.48 a tonne on Friday amid absent physical trade in the Singapore window and as suppliers placed lower offers.

Fuel oil stocks in ARA fell 50,000 tonnes to 1.2 million tonnes in the week ended Aug. 26, data from Dutch consultancy Insights Global (IG) showed. Compared with last year, however, the ARA inventories were 9% higher and on par with the five-year seasonal average of 1.18 million tonnes

The September crack for 180 cst FO is higher at  -$1.40 /bbl with the visco spread at $2.05 /bbl.

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

No fresh trades for 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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