Crude Oil
Oil prices pared gains in volatile trade on Tuesday . Brent crude oil rose 39 cents to settle at $62.08, after earlier touching a session high of $63.58. U.S. crude settled up 30 cents at $53.25 a barrel.
U.S. President Donald Trump made clear he would revert to tariffs on China if the two sides could not resolve their differences. The comments put a damper on market enthusiasm and a major selloff took place across stocks and other assets, with Wall Street falling more than 3 percent on Tuesday.
Iran President Hassan Rouhani said “if Iran cannot export oil from the Gulf, no other country can”, in an apparent threat to disrupt other countries’ oil shipments through the Gulf if Washington presses ahead with efforts to halt Iranian oil exports.
Saudi Oil Minister Khalid Al-Falih said it was too soon to be certain that OPEC and other oil exporters would cut production because the terms of a deal remain unresolved. Al-Falih said he thought the market was oversupplied but he cautioned that all members of OPEC and its allies needed to come together for a cut to go ahead. Trump has put pressure on Saudi Arabia to keep prices low, blaming the kingdom for rising prices.
API Data
The API reported another substantial build in crude stocks catching the market a bit by surprise. What was more bearish was the information that both Gasoline an Distillate stocks built significantly as well.
Official U.S. government data will be released on Thursday, Dec. 6 due to the George Bush memorial holiday today. If the data confirms a crude build, it will be the 11th consecutive stockpile increase.
Naphtha
No fresh news on the naphtha markets today.
The December crack has dropped to -$ 4.25 /bbl
Gasoline
The benchmark Singapore 92 RON gasoline crack against Brent crude moved back to a discount of $1.44 a barrel, down from minus $0.36 a barrel on Friday and its lowest since November 2011.
Fears of further exports of the motor fuel from China and South Korea added to an already over supplied market.
The December crack has dropped to $ 0.20 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asian gasoil prices slipped on Tuesday as inventory of the fuel remained ample in the region. Several tankers carrying gasoil are floating off Taiwan waters.
The December crack has dropped to $ 12.85 /bbl with the 10 ppm crack at $ 13.60 /bbl. The regrade is lower at $ 2.10 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Weighed down by lower deal values, cash premiums of Asia’s mainstay 380-cst high-sulphur fuel oil (HSFO) on Tuesday slipped from a two-week high hit in the previous session.
The 380-cst fuel oil cash premium slipped to $7.56 a tonne to Singapore quotes on Tuesday, down from $8.97 a tonne on Monday.
Trade volumes for physical cargoes of 380-cst HSFO, however, remained elevated in the Singapore window on Tuesday, extending the spike in trade liquidity that kicked off the first trading session of December. Eight 20KT cargo trades were reported in the Singapore trading window yesterday with Trafigura continuing to be the major buyer.
The traded volumes of physical fuel oil cargoes on the second trading day of December, which now total 520,000 tonnes, represented two-thirds of the 760,000 tonnes of fuel oil deals that were traded in the whole of November.
The December 180 cst crack has improved to +$ 3.00 / bbl with the visco spread at $ 0.55 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to report.
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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.