Crude Oil
Oil prices rose on Tuesday after China signaled progress in trade talks with the United States. Brent crude futures rose 74 cents to settle at $59.70 a barrel. WTI crude futures rose 85 cents to settle at $54.16 a barrel..
OPEC and its allies plan to consider whether to deepen cuts to crude supply when they next meet in December due to worries about weak demand growth in 2020. Traders said the possible supply cut pushed prices higher. Our view is that if there remains adequate supply with evern 236% compliance to current levels of supply cuts, can OPEC cut even more that this level and still support their own economies?
India’s oil imports fell to their lowest in more than three years in Sep’19 to 3.82 MB/D data obtained from industry and shipping sources showed, as some refiners cut purchases due to shutdowns for maintenance and fuel upgrades
api data
Of the rise in crude stocks, nearly 2 million barrels was contributed by stocks at Cushing. Oil production was reported at 12.6 mbpd.
Inventory data from the EIA is expected today.
Naphtha
Asia’s naphtha crack rose for the second day on tight supply on Tuesday, reaching a four-session high of $91.45 a tonne.
Naphtha arriving this month from the West including Europe and the Mediterranean is seen at a five-month high of up to 1.5 million tonnes versus September when it was up to 1.1 million tonnes. Western cargoes arriving in November are projected to go even higher to over 1.6 million tonnes but even this might not be sufficient to ease the supply tightness.
Recent production disruption in Saudi Arabia and ongoing refinery maintenance in Asia, Europe and the Middle East coupled with strong demand had created a supply dent that had pushed spot premiums to levels not seen since 2013.
The November crack is higher at – $ 1.85 / bbl.
Gasoline
No fresh news on Gasoline markets.
The November crack is lower at $ 6.65 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10ppm gasoil were at $1.10 a barrel to Singapore quotes on Tuesday, 17 cents lower from Monday.
Asia’s cash differentials for jet fuel weakened further on Tuesday to their biggest discounts in more than four months, hurt by ample supplies and lacklustre buying interest for physical cargoes. Cash discounts for jet fuel were at 12 cents a barrel to Singapore quotes, the widest since June 20. The jet cash differentials were at an 11-cents discount a day earlier.
The November crack for 500 ppm Gasoil has dropped to $ 19.90 /bbl with the 10 ppm crack at $ 17.90 / bbl. The regrade is at + $ 0.10 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash premiums for cargoes of Asia’s 380-cst high-sulphur fuel oil (HSFO) climbed to a near three-week high on Tuesday, boosted by firm buying interest in the Singapore trading window. The 380-cst cash premium rose to $39.16 per tonne above Singapore quotes, up from $37.87 per tonne in the previous session and its highest since Oct. 2.
While demand for HSFO marine fuels has begun to decline ahead of the global cap on marine fuels starting January 2020, tight supplies and limited arbitrage inflows of the so far mainstay bunker fuel have helped keep premiums of the fuel elevated. As the market transitions to low-sulphur alternatives, however, suppliers are reluctant to ship in large quantities of HSFO bunkers in order to minimize the risks of losses as the industry transitions to the cleaner fuels.
The November 180 cst crack is lower at -$ 14.70 / bbl with the visco spread at $ 2.30 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh recommendations 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 refiner.
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.