Crude Oil
Oil prices rose more than 2% on Thursday to the highest in nearly two months following a Reuters report that OPEC and its allies are likely to extend output cuts until mid-2020. Brent crude futures settled at $63.97 a barrel, up $ 1.57 cents. WTI crude also rose $ 1.57 to settle at $58.58 a barrel.
WTI touched a session high of $58.67 a barrel, the highest since Sept. 23 and Brent climbed to a high of $64.03, the highest since Sept. 24.
Russian President Vladimir Putin said on Wednesday Russia and OPEC had “a common goal” of keeping the oil market balanced and predictable, and Moscow would continue cooperation under a global deal cutting oil supply.
Unrest erupted on Nov. 15 in Iran after the government announced gasoline price hikes of at least 50%, and quickly turned political with protesters demanding top officials to step down.
In Iraq on Thursday, seven people were killed when security forces shot live fire and tear gas canisters at demonstrators in Baghdad, security and medical sources said, in renewed deadly violence as authorities seek to crush anti-government protests.
Also supportive for the markets, the Chinese commerce ministry said China will strive to reach an initial trade agreement with the United States as both sides keep communication channels open.
Japan’s factory activity shrank for a 7th consecutive month in Nov’19, with the Jibun Bank Flash Japan Manufacturing PMI edging up to a seasonally adjusted 48.6 from a final 48.4 as domestic and export demand remained in the doldrums.
Naphtha
Asia’s naphtha crack rose for the third day to hit a one-month high of $91.23 a tonne on Thursday, supported by demand.
South Korea’s YNCC bought naphtha for first-half January arrival at Yeosu at premiums in levels between low and mid $20s a tonne to Japan quotes on a C&F basis. This was lower versus $27 a tonne premium YNCC had paid on Oct. 24 for first-half December cargoes. In the previous session, Hanwha Total, KPIC and Japan’s Ashahi Kasei had picked up the fuel for first-half January delivery. Hanwha Total paid premiums at levels in the high $20s a tonne, which also reflected a dip when compared to about $30 a tonne premium it had paid on Oct. 24. Despite spot premiums having eased, the current levels are still significantly higher versus a year ago when prices were at discounts.
The December crack is lower at – $ 2.05 / bbl.
Gasoline
Asia’s gasoline crack similarly rose for the third day to reach a one-week high of $9.33 a barrel. Singapore’s onshore inventories of light distillates edged up 169 KB barrels to reach a two-week high of 10.8 million barrels in the week to Wednesday, data from Enterprise Singapore showed. However, this was 19% lower compared to the same period last year.
The December crack is higher at $ 9.20 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10 ppm sulphur content inched lower by a cent on Thursday to 20 cents per barrel to Singapore quotes, a level not seen since Sept. 19.
Cash discounts for jet fuel narrowed by three cents to 58 cents per barrel to Singapore quotes.
Singapore onshore middle distillate stocks rose 14.4% to 11.6 million barrels in the week ended Nov. 20, Enterprise Singapore data showed. Weekly middle distillate inventories have averaged 11.2 million barrels so far this year, having averaged 9.6 million barrels a week in 2018, Reuters calculations showed. Overall, onshore middle distillate inventories were 5% higher year-on-year.
The December crack for 500 ppm Gasoil is lower at $ 13.30 /bbl with the 10 ppm crack at $ 14.25 / bbl. The regrade is at $ 0.90 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The cash premium for 380-cst HSFO , which has slumped about 95% over the last two weeks, was at $1.58 per tonne to Singapore quotes on Thursday, compared with 85 cents a day earlier.
The December 380-cst barge crack widened its discount to minus $31.21 a barrel, compared with minus $31.19 on Wednesday, data from Refinitiv Eikon showed.
Meanwhile, residual fuel oil inventories in the Singapore fuel oil trading and storage hub climbed to a two-week high in the week ended Nov. 20, despite slightly weaker net imports, official data showed on Thursday.
Onshore fuel oil stocks in Singapore rose by 475 KB from the previous week to 20.83 million barrels, data from Enterprise Singapore showed.
The December 180 cst crack is lower at -$ 22.50 / bbl with the visco spread at $ 2.50 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
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 refiner.
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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.