Trade Ideas: Petrochemicals, Fuel Oil

This week, Research Associate Vincent Wu brings you trade ideas in benzene/MOPJ naphtha and Sing 380 fuel oil.

Firstly, we take a long-positioned view in the differential between Benzene and Asia Naphtha. The spread has sold off in recent weeks on poor fundamentals. As refinery margins get stronger and traders increase short positions in naphtha, we anticipate a reversal in the Benzene MOPJ spread.

Our second idea is to go short in Asia High Sulfur Fuel Oil. Whilst 380 structure has seen a strong performance, technical indicators show an overbought market. What’s more, Singapore is expecting more cargos arriving from Russia, Iran, and the UAE in the coming weeks, which will improve the supply situation.

We discuss these three trade ideas in detail in our weekly Onyx Alpha report. For further information on where you can access this report, kindly contact our sales team: