Oil edged lower on Monday on uncertainty about whether the world’s major oil producers would agree to extend its deep output cuts at talks this week.
Brent crude January futures expired 59 cents lower at $47.59 a barrel, while the February contract fell 46 cents to $47.79. WTI futures fell 19 cents to settle at $45.34 a barrel.
The day’s decline came after a strong month for crude benchmarks, which jumped about 27% in their biggest monthly gains since May on hopes for forthcoming vaccines for COVID-19 that would presumably help economic activity and oil demand resume.
OPEC and allies led by Russia postponed talks on oil output policy for 2021 to Thursday, three sources said on Monday as key players still disagreed on how much oil they should pump amid weak demand due to the coronavirus pandemic.
OPEC oil output rose for a fifth month in Nov’20, a Reuters survey found, pumping 25.31 MB/D, up 750 KB/D MoM, as increased Libyan production offset full adherence by other producers to cuts agreed in an OPEC-led supply deal.
Money managers raised their net long US crude futures and options positions by 33,086 contracts to total 310,167 in the week to 24 Nov’20, the US CFTC said on Monday.
At a global level, the death toll from the COVID-19 virus rose to 1,473,456 (+8,291 DoD) yesterday. The total number of active cases rose by around 70,000 DoD to 18.13 million. (Click here for details).
Asia’s naphtha crack rose for a second straight session to reach a near one-week high of $46.18 a tonne on Monday. But it was still 33.8% lower versus a month ago as supplies remained high. Weak fundamentals have kept open-specification naphtha spot prices in South Korea, the region’s top naphtha importer, at discount levels.
The December crack is steady at – $1.45 /bbl.
Asia’s gasoline premium to Brent fell to a two-session low of $1.64 a barrel on ample supplies.
The December crack is lower at $2.20 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asian refining margins for 10 ppm gasoil on Monday hit their highest level in over three months, while cash differentials for industrial fuel inched up.
Cracks for 10 ppm gasoil climbed 22 cents to $5.28 a barrel over Dubai crude during Asian trading hours, a level not seen since Aug. 20. Gasoil cracks have risen about 45% in November, their biggest monthly gain since June, as recent refinery run cuts and a few shipments of gasoil on new-build supertankers have helped drain out some of the excess supplies from the region.
Meanwhile, the gasoil EFS is still trading at minus $3.57 per tonne on Monday, typically making it unworkable for arbitrage shipments.
The volume of physical jet fuel deals done during the Platts MoC process in Singapore plunged 88.67% in Nov’20, with only 2 jet fuel/kerosene cargoes, or 345 KB, changing hands the whole month, as air travel demand remained depressed.
The December crack for 500 ppm Gasoil is higher at $4.65 /bbl with the 10 ppm crack at $ 5.45 / bbl. The regrade is at -$ 0.90 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s HSFO cargo cash premiums fell on Monday amid lower-than-expected demand for the fuel for use in power generation, particularly from South Asia during December. The 180-cst HSFO cash premium fell to a near three-week low of $2.75 per tonne to Singapore quotes while the 380-cst HSFO differential fell to a more than three-week low of $4.56 per tonne.
The December crack for 180 cst FO is lower at -$1.50 /bbl with the visco spread at $0.70 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh activity today.
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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.