Crude OilCovid StatsNaphthaGasolineDisitllatesFuel OilHedge Strategy

Oil prices fell on Tuesday as traders braced for the possibility of higher weekly U.S. crude stockpiles than projected by analysts. 

Brent crude finished the session slightly lower, ending down 18 cents, or 0.3%, at $64.17.

WTI settled down $1.01, or 1.6%, at $60.55.

OPEC is lowering its 2021 oil demand growth estimate by 5% to 5.6 MMB/D, delegates said Tuesday, in a sign that the producer group and its allies may continue to tread cautiously on returning more crude to world markets.

The Suez Canal expects 140 ships to pass on Tuesday after the freeing of a container ship stranded for nearly a week allowed it to reopen, but experts warned that disruptions to global shipping could take months to resolve.

China’s factory activity expanded at a faster-than-expected pace in Mar’21, with the official manufacturing PMI rising to 51.9 from 50.6 in Feb’21, as factories that had closed for CNY resumed production to meet improving demand.

api data

The API report was decidedly bearish with only gasoline showing a strong draw. We will look to the DOE data for the official report.

At a global level, the death toll from the COVID-19 virus rose to 2,815,045 (+10,866 DoD) yesterday. The total number of active cases rose by around 70,000 DoD to 22.06 million. (Click here for details)

Asia’s naphtha crack continued to fall on Tuesday as the Suez Canal reopened to traffic and eased concerns of supply disruptions to Asia.

The naphtha crack dropped to a near two-week low of $96.50 a tonne on Tuesday, down from $97.55 in the previous session and a near two-week high of $108.90 per tonne on Friday.

Similarly, the front-month naphtha arbitrage spread, the price difference between naphtha cargoes in Asia and Northwest Europe, slipped 50 cents from the previous session to $14.75 a tonne on Tuesday, Refinitiv data in Eikon showed.

The April crack is higher at $0.60 /bbl

Asia’s gasoline crack climbed to a more than one-year high on Tuesday, boosted by expectations of increased imports of the motor fuel from Indonesia after its Balongan refinery was shut due to a fire in the facility’s storage area. The gasoline crack climbed to $6.88 a barrel on Tuesday, up from $6.19 on Monday and its highest since March 10, 2020.

Indonesian state oil firm Pertamina, however, said it expects operations at the 125,000 barrel per day facility to resume in a matter of days and there was no plan to import fuel yet. “At the moment we’re still optimising national stock,” said Putut Andriatno, corporate secretary of Pertamina’s commercial and trading unit.

The April crack is higher at $8.70 /bbl.

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

Cash differentials for 10 ppm gasoil were unchanged at a discount of 27 cents per barrel to Singapore quotes on Monday.

Cash differentials for jet kero narrowed by another cent to a discount of 53 cents per barrel to Singapore quotes on Monday.

Asian refining margins for jet fuel dropped to their lowest level in nearly five months on Tuesday, weighed down by persistent weakness in aviation demand and airlines trimming their scheduled seat capacity for the coming months. Global air carriers have removed 50 million seats from their April schedules in the last month, while May capacity was dropped by 40 million seats, according to aviation data firm OAG.

The April crack for 500 ppm Gasoil is unchanged at $3.60 /bbl with the 10 ppm crack at $ 4.65 / bbl. The regrade is at -$ 1.35 /bbl. 

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

Asia’s 0.5% very low-sulphur fuel oil (VLSFO) front-month refining margin and time spread fell to fresh lows on Tuesday, weighed down by ample near term supplies of the fuel and relatively steady arbitrage flows in April and May, trade sources said.

The front-month VLSFO crack versus Dubai dropped to $11.20 a barrel, down from $11.44 a barrel in the previous session and its lowest since Jan. 8, according to Refinitiv data.

The April/May VLSFO time spread fell to 25 cents a tonne on Tuesday, down from 50 cents a tonne on Monday and its lowest since Dec. 24, according to Refinitiv data in Eikon.

The April crack for 180 cst FO is lower at  -$4.35 /bbl with the visco spread at $0.95 /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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