Crude Oil
Oil prices rose about 2 percent in choppy trading on Wednesday. Brent crude futures gained $1.11 to settle at $54.91 a barrel. WTI crude ended $1.13 higher at $46.54 a barrel. Oil futures were buoyed by U.S. equity markets as major stock indices pared earlier losses..
Prices moved in a wide range today with Brent trading between $52.51 and $56.56. WTI hit a session low at $44.35 and high at $47.78.
Oil futures were buoyed by U.S. equity markets as major stock indices pared earlier losses. However, concerns about weakening global economic growth which could hurt demand for oil remained.
Yesterday China reported disappointing manufacturing and sales numbers, highlighting the challenges facing Beijing as it seeks to end a bruising trade war with Washington. China also issues its latest batch of crude oil import quotas for this year. The volumes were lower than those issued at the same time last year.
Euro zone manufacturing data also proved disappointing, as activity barely expanded at the end of 2018, according to a survey.
Russia’s Oil Production hit a post Soviet record high of 11.45 mb / day. in December. Iraqi exports also rose significantly in December to 3.76 mb / day.
OPEC will be challenged to maintain high price levels going forward. However, the energy minister for the United Arab Emirates, an OPEC member, said on Tuesday he remained optimistic about achieving a market balance in the first quarter. And with OPEC output dropping .
Naphtha
The naphtha crack also fell, dropping to $50.13 a tonne, making this the lowest since Dec. 19 as buyers kept to the sidelines after purchases in late December.
The January crack has sunk to -$ 3.20 /bbl
Gasoline
Asia’s gasoline crack started the year at a 20 cents per barrel premium, down from 39 cents on Friday, pressured by heavy supplies. State-owned Indian fuel retailers have stopped absorbing a government-mandated cut of 1 rupee (0.014 U.S. cents) a litre in their marketing margins on the sale of petrol and diesel after a steep fall in global oil prices..
The January crack is crashed to $ 1.10 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash discounts for 10ppm gasoil narrowed to 73 cents a barrel to Singapore quotes on Wednesday, as against a discount of 85 cents a barrel on Friday. The prompt-month time spread, which has remained in contango since mid-November, widened to a discount of 77 cents per barrel on Wednesday.
Meanwhile, cash discounts for jet fuel were at $1.30 a barrel to Singapore quotes on Wednesday, compared with a discount of $1.23 a barrel on Friday.
The January crack is steady at $ 11.50 /bbl with the 10 ppm crack at $ 12.50 /bbl. The regrade is lower at $ 2.50 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
S&P Global Platts, the agency that publishes benchmark fuel oil price assessments, on Wednesday kicked off physical trade activity for low-sulphur fuel oil (LSFO) with a maximum 0.5 percent sulphur content in Singapore ahead of a sulphur cap by the International Maritime Organization (IMO) in 2020.
However, physical and paper trade liquidity was thin for the nascent LSFO market.
The January 180 cst crack has tanked to -$ 0.55 / bbl with the visco spread at $ 0.55 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Both, fuel oil cracks, as well as the regrade have come off their highs. Cal 20 has also eased.
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.