Oil prices jumped nearly four percent on Monday after the United States and China agreed to a 90-day truce in a trade dispute and Canada’s Alberta province ordered a production cut, while exporter group OPEC looked set to reduce supply. February Brent futures rose $ 2.23 to settle at $61.69 a barrel. U.S. crude rose $ 2.02 to settle $52.95 a barrel.
Within OPEC, Qatar said it will leave the producer club in January. Qatar’s oil production is only around 600 kbpd, but it is the world’s biggest exporter of liquefied natural gas.
Qatar’s decision to quit OPEC shows the frustration of small producers at the dominant role of a Saudi and Russia-led panel.
Iran’s OPEC governor Hossein Kazempour Ardebili told Reuters, adding that any supply cuts should come only from countries that had increased output.
Russian President Vladimir Putin said on Saturday he had no concrete figures on possible oil output cuts, though his country would continue its contribution to reducing global production. Russian oil output stood at 11.37 million bpd in November, down from a post-Soviet record of 11.41 million bpd it reached in October. Russia said it would cut output by a maximum of 150kbpd, an additional sign that an agreement to cut output at the upcoming OPEC meeting looks imminent. However 150 kbpd is only 50% of what it had cut in 2017.
No fresh news on the naphtha markets today.
The December crack has improved to -$ 3.90 /bbl
The benchmark Singapore 92 RON gasoline crack against Brent crude moved back to a discount of $0.36 a barrel, a two session low and down from a premium of $0.17 a barrel on Friday.
Soaring crude oil, prices along with ample supplies of the fuel and sluggish prompt demand continued to weigh on sentiment.
The December crack has dropped to $ 0.25 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
The Asian gasoil cash differentials were under pressure on Monday from ample inventory in the region, with China cranking up exports and rare diesel exports seen from the Philippines.
Traders were also focused on term negotiations with South Korean refiners still locked in discussions with buyers to sell gasoil and jet fuel for next year.
Top Philippine oil refiner Petron Corp exported a diesel cargo in November in a rare move, and offered a December-loading shipment. The Philippines is typically a net importer of diesel and it is not usual for the country to export diesel.
The December crack has eased marginally to $ 13.15 /bbl with the 10 ppm crack at $ 13.90 /bbl. The regrade is higher at $ 2.50 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Buying interest for physical cargoes of 380-cst high-sulphur fuel oil (HSFO) intensified on Monday, boosting cash premiums of the fuel to a two-week high. This came just as expectations of easing supply constraints last week helped ease bullish sentiment that has dominated the market for about a month, dragging 380-cst cash premiums to a 1-1/2 month low on Friday.
The 380-cst fuel oil cash premium jumped to $8.97 a tonne to Singapore quotes on Monday, up from $5.79 a tonne on Friday and its widest premium since Nov. 20.
The December 180 cst crack has improved to +$ 2.90 / bbl with the visco spread at $ 0.55 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
The regrade continues to ease. Fuel Oil continues to remain strong. There is a strong urge to hedge the 1Q19 crack further, but we will desist for now.
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.
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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.