Crude Oil
The last nail was driven into the coffin of the OPEC production cutback story as the DEA reported a build of over 14 Million Barresl to Crude Stocks. This is the largest ever reported weekly build in stocks since 1982. Most of this was in the Gulf Coast.
The DEA also reported a drop in refinery runs to 85.2%, a drop in gasoline stocks of 2.2 million barrels and a drop in distillate stocks of 1.8 million barrels.
The Brent contract settled at $46.86 after hitting a low of $ 47.74 during the day. WTI settled at $ 45.34 / bbl.
The present outlook for crude stocks seems bleak with Russian output at record levels, Nigerian production at over 1.2 million barrels / day and Libyan production having doubled since September.
Having said that, it is important to understand that
a. Product Stocks are falling and in demand.
b. Refinery Runs are at low levels
c. Margins are on the increase.
The increase in margins may well spark an increased utilization of refineries which will cascade to increased crude throughput i.e. increase in demand for crude which should mark a rally.
Naphtha
Naphtha eased in the physical market yesterday. However, the crack structure is same to marginally changed, reflecting great strength in the prompt.
Gasoline
Like naptha the gasoline market too remains same to a little bit lower. The gasoline crack is quoting around $ 13.2/bbl for November and close to $ 12 for December
Middle Distillates
Middle distillate cracks too have eased slightly. Gasoil is quoting at around $ 13.80 / bbl for November and $ 13.2/bbl for December.
The regrade continues to slip with even January now showing a level of $0.55 / bbl
Fuel Oil
The fuel oil crack is the star performer of the barrel for today as it is the only product to have shown considerable appreciation. The November crack is showing a level of -$1.31 / bbl while the December crack is at -$ 2.1 / bbl. This is approximately 50 cents / bbl better than yesterday.
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.