Crude Oil
Crude Oil resumed its upward climb as the front month changed for Brent. The January future, which became the front month today, settled 13 cents higher at $60.62 /bbl. WTI gained 24 cents to settle at $54.54 /bbl.
The market continues to remain upbeat, particularly in the US which has led the rally in crude in almost every trading session for the last two weeks.
In other news, Saudi Aramco hiked its OSPs to Asia and Europe by 50-60 cents per barrel. However, its price hike to US was just 10 cents a barrel. The differential hike probably makes sense in the light of the widening Brent – WTI spread.
However, one cannot help but wonder what the impact of the continuous hike in prices combined with the hike in prices of the indicator will be on oil demand.
Naphtha
The physical naphtha made another new high yesterday settling above $120 at $120.80 /MT. The narrow propane – naptha differential makes it more attractive for the petchem producers as a feedstock. Furthermore, most of the material coming in from the West is not paraffinic naphtha, which is the preferred grade for process. Hence, supplies are getting tighter.
The paper crack for November is valued higher at $ 4.35 /bbl. These levels are extremely attractive and refiners should consider hedging at such levels. We would even recommend hedging the December crack at over $ 4.00 /bbl
Gasoline
The physical gasoline crack reached a 1-1/2 month high of $10.89 /bbl encouraged by active trades in the Platts Trading Window which witnessed a nine cash deals totaling to 450,000 bbls. Thursday trades made it the highest volume traded in a single session since September 4 earlier this year.
The November 92 Ron paper crack has also jumped in line with the physical cracks and is valued at $ 12.45 /bbl.
Distillates
Distillate markets continue to remain under pressure in the wake of high inventories, lackluster demand and surplus availability. Singapore’s onshore gasoil and jet fuel stocks climbed to a more than one-month high of about 12 million barrels in the week to November 1. This was primarily on account of increased imports into Singapore from South Korea, Iran and China on the one hand and decreased exports out of Singapore to Vietnam, Myanmar and Hong Kong on the other hand.
The November gasoil crack has fallen to $ 11.70 /bbl today. The regrade has moved up to $ 0.85 /bbl.
Fuel Oil
Fuel oil cracks lost ground on the back of rising inventories in the key trading hub of Singapore. Singapore’s onshore fuel oil inventories rose for a fourth straight week, up 2.5 % from the previous week to 3.84 million MT in the week to November 1. Fuel oil stocks are now 12.6 % higher year on year.
The November 180 cst crack is lower at -$1.90 / bbl. The visco spread is valued at $ 0.65 /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