Crude Oil
Oil prices fell on Friday, pulling back from two-month highs as concern over U.S.-China trade talks overshadowed expectations of an extension to OPEC+ production cuts. Brent crude futures eased 58 cents to settle at $63.39 a barrel.. WTI fell 81 cents to settle at $57.77 a barrel, dropping from its session high of $58.74.
After paring their gains, both benchmarks ended the week little changed.
Uncertainty over whether the United States and China will be able to reach a partial trade deal that would lift some pressure on the global economy kept a lid on prices. Chinese President Xi Jinping on Friday said China wants to work out an initial trade pact with the United States and has been trying to avoid a trade war but is not afraid to retaliate when necessary. China has invited top U.S. trade negotiators for a new round of face-to-face talks in Beijing as efforts continue to strike at least a limited deal.
US energy firms this week reduced the number of oil rigs operating for a fifth week in a row by 3 to total 671 (-214 Year on Year) as producers cut spending on new drilling, according to Baker Hughes
Naphtha
Asian naphtha cracks rose for the fourth straight session to reach a five-week high of $94.58 a tonne as recent demand has soaked up supplies.
The December crack has dropped – $ 2.65 / bbl.
Gasoline
Asia’s gasoline margin fell on Friday to a 2-1/2 week low of $8.56 a barrel, erasing gains from the last three days as inventories across the major regions of Singapore, the U.S. and Europe were higher week-on-week.
China’s gasoline exports in Oct’19 more than doubled from a year ago to a record 1.73 MMT, as refiners’ increasing processing runs created a fuel surplus in the domestic market, spurring overseas sales.
Gasoline stocks in ARA refining and storage hub edged to a two-week high of 792 KT in the week to Thursday after hitting a 14-month low in the week to Nov. 14. The current levels are however 18% lower than a year ago.
The December crack is lower at $ 8.80 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10 ppm sulphur content were at 19 cents a barrel to Singapore quotes, their lowest level in nine weeks. The premiums were at 20 cents a barrel on Thursday. The gasoil cash differentials have slumped 82.7% over the last one month as the region got awash with supplies.
Gasoil exports from China and India have increased due to weaker consumption in their respective domestic markets, while incremental demand for marine gasoil (MGO) ahead of a switch to cleaner marine fuels, as earlier expected, has not arrived yet.
China’s diesel exports were at 1.19 MMT in Oct’19 while Jet kerosene shipments were at 1.58 MMT.
Gasoil stocks in ARA fell by 65 KT to 2.41 million tonnes in the week ended Nov. 21.
Cash differentials for jet fuel remained unchanged at a discount of 58 cents per barrel to Singapore quotes.
The December crack for 500 ppm Gasoil is lower at $ 13.05 /bbl with the 10 ppm crack at $ 14.00 / bbl. The regrade is at $ 0.65 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s cash premiums for the mainstay 380-cst high-sulphur fuel oil (HSFO) climbed for a second consecutive session on Friday, but demand for the dirty residual fuel grade has been steadily declining ahead of a switch to cleaner marine fuels starting January.
The cash premium for 380-cst HSFO, which has dived about 89% in the last two weeks, was at $2.59 per tonne to Singapore quotes on Friday, compared with $1.58 a day earlier. The cash differentials for 180-cst HSFO, however, widened their discounts to minus $5.27 a tonne to Singapore quotes on Friday, compared with minus $2.75 a tonne on Thursday.
The front-month spread for 380-cst HSFO remained in narrow backwardation on Friday to trade at a premium of $3.25 a tonne.
The 380-cst barge crack to Brent crude for December widened its discount to minus $31.73 a barrel, compared with minus $30.91 on Thursday.
Onshore fuel oil stocks in Singapore rose by 475 KB from the previous week to 20.83 million barrels, data from Enterprise Singapore showed.
The December 180 cst crack is higher at -$ 22.35 / bbl with the visco spread at $ 1.75 /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.