Crude Oil
Crude markets rose today, arguably in response to a strong upward revision in US Q3 GDP growth to 3.5%. Brent settled at $ 55.05/bbl, up 55 cents on the day while WTI gained $ 0.46 / bbl to settle at $ 52.95 / bbl.
Trading for the last two weeks of the year is traditionally thin and we are unlikely to see any dramatic movements either way.
Naphtha
The Naphtha markets continued to stay strong, propped by strong gasoline prices. and falling crude Supplies nevertheless seemed ample. The January crack was at a value of -$0.1 /bbl while February was at a value of $-0.6 / bbl. If the gasoline strength continues, it is likely we will see the crack return to positive territory.
Gasoline
While the demand for gasoline is strong, the gasoline crack for January eased to around $12.5 / bbl. This could be due to market consolidation and some profit taking on the paper side.
Middle Distillates
The gasoil crack for January rose to around $ 11.25 /bbl propped by a drop of around over 10% in stocks week on week. This was somewhat tempered by the availability of ample supplies.
The regrade for January gained a bit in value to $ 1.40 /bbl.
In this part of the barrel there appears to be no dearth of supply at current levels of consumption. Therefore, it’s performance is going to be demand led which again will be largely determined by the strength of the winter.
Fuel Oil
Fuel Oil prices eased a little with the January crack being valued at -$1.35 and February at -$ 2.15 /bbl.
Stocks surged by 2.4 Million barrels largely due to the arrival of stocks to the tune of 1.07 Million tonnes into Singapore from Europe, Venezuela and Thailand.
If this level of supply continues, it is unlikely that this extremely good performance of the fuel oil crack will continue.
Refiners would be advised to check the possibility of a further increase in stocks and hedge a little bit of their Q1 margins as an insurance.
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.