Crude Oil
Oil futures gained about 1% on Monday on speculation that the OPEC+ may deepen the supply cut and stronger manufacturing activity numbers from China. Brent crude futures rose 43 cents to settle at $60.92 a barrel. WTI rose 79 cents to settle at $55.96 a barrel.
Oil eased off session highs as Wall Street dropped after U.S. President Donald Trump unexpectedly announced plans to reimpose tariffs on steel and aluminium from Argentina and Brazil.
US factory activity contracted for a fourth straight month in Nov’19, with the ISM Manufacturing PMI falling to 48.1, as new orders slumped back to around their lowest level since 2012, tempering optimism over the economy that had been fanned by a recent run of upbeat reports.
China on Monday banned US military ships and aircraft from visiting Hong Kong and slapped sanctions on several US non-government organisations for allegedly encouraging anti-government protesters in the city to commit violent acts.
OPEC and allied producers including Russia are expected to extend output cuts this week and could trim an additional 400,000 barrels per day (bpd) or more.
U.S. output in September increased to a record 12.46 million bpd, according to a government report on Friday.
Naphtha
Asia’s naphtha crack fell on Monday from a near two-year high in the previous session but remained supported by tight supplies. The naphtha crack fell to $111.53 a tonne on Monday, from $123.73 a tonne on Friday. The naphtha crack value has been supported by narrow arbitrage supplies into Asia recently.
The December crack is higher at – $ 1.20 / bbl.
Gasoline
No fresh news on the gasoline markets today.
The December crack is lower at $ 8.45 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10 ppm sulphur content rose to 19 cents a barrel to Singapore quotes on Monday, helped by firmer deal values in the physical trade window on Monday. They were at a premium of 5 cents a barrel on Friday.
Cash differentials for jet fuel were at a discount of 36 cents per barrel to Singapore quotes on Monday, compared with a discount of 50 cents a barrel on Friday.
The December crack for 500 ppm Gasoil is lower at $ 13.10 /bbl with the 10 ppm crack at $ 14.05 / bbl. The regrade is at $ 0.25 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month 0.5% very low-sulphur fuel oil (VLSFO) crack against Brent crude climbed to a 2-1/2 month high on Monday as demand for the new marine fuel continues ramp up ahead of the global sulphur cap at the start of 2020.
The higher VLSFO demand has been displacing demand for high-sulphur fuel oil (HSFO). The front-month VLSFO crack climbed to $20.51 a barrel above Brent crude, up from $18.85 a barrel on Friday and its highest since Sept. 18, Refinitiv data showed.
The front-month 380-cst HSFO barge crack to Brent also firmed on Monday to minus $32.88 a barrel, rebounding from a record low of $33.46 a barrel on Friday, the data showed.
The December 180 cst crack is higher at -$ 24.50 / bbl with the visco spread at $ 1.40 /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.
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.