Crude Oil
Crude Oil continued its gains with Brent settling 47 cents higher at $61.37 /bbl and WTI settling 23 cents higher at $54.38 /bbl.
With Brent-WTI differential at record highs in recent weeks, it became feasible for the U.S. to export more crude. In fact, since mid 2016, U.S. crude exports have jumped to about 2 million bbls/day and production has risen by almost 13 % to 9.5 million bbls/day. In related news, China’s Sinopec is heard to be evaluating two projects in the U.S. that could boost Gulf Coast crude oil exports further and also expand storage facilities in the Caribbean.
Adding to the bullish sentiment was news that OPEC’s adherence to its pledged supply curbs rose to 92 % in October, up from 86 % in September. This was primarily attributed to reduced production from Saudi Arabia and Venezuela.
API Data
The API in its Report yesterday said that in the week to October 27, U.S. Crude inventories fell by 5.1 million barrels to 456.8 million bbls, against analysts’ expectations for a draw of 1.8 million bbls. On the products side, Gasoline stocks reduced by a considerable 7.7 million bbls while Distillate inventories fell by 3.1 million bbls.
As is customary, markets will look to the DOE data for corroboration.
Naphtha
Naptha paper cracks have resumed their bull run as the strong demand for cargoes continues. In a clear indication of tightening supplies, Taiwan’s Formosa was heard to have bought a cargo of open-specification naphtha on C&F basis for December at a premium of around $6 /MT to its own price formula, which makes it the highest premium Formosa has paid since April 13, 2015.
The paper crack for November is valued higher at $ 3.65 /bbl.
Gasoline
The considerable draw in gasoline inventories in the U.S. and an active Platts Asian Trading Window which saw three trades concluded, has helped push up gasoline cracks smartly.
The November 92 Ron paper crack is valued higher at $ 11.55 /bbl.
Distillates
Distillate cracks continue to slide as supplies of high sulphur diesel is expected to increase further after China announced that with effect from November 1, it would stop domestic sales of diesel with sulphur content higher than 10ppm, in its latest effort to clean up the nation’s air. This move will prompt oil companies in the country to export higher-sulphur diesel in the coming months.
The November gasoil crack is lower at $ 12.65 /bbl today. The regrade has moved up to $ 0.25 /bbl.
Fuel Oil
Paper Fuel Oil cracks have managed to climb further even though demand for physical spot 380-cst ex-wharf fuel oil has been sluggish in recent weeks amid rising outright prices which have climbed to their highest level since June 2015.
The November 180 cst crack is valued higher at -$1.70 / bbl. The visco spread is valued at $ 0.80 /bbl.
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.
Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity