Crude Oil
Oil prices rose again on Monday with growing optimism about resolution to the US-China tariff war. Brent futures rose 44 cents to settle at $62.13 a barrel. WTI crude futures rose 34 cents to settle at $56.54 a barrel..
Chinese President Xi Jinping and U.S. President Donald Trump have been in continuous touch through “various means,” China said on Monday, when asked when and where the two leaders might meet to sign a trade deal.
Hedge funds have started to rebuild long positions in crude and fuels.
Capping gains, U.S. crude oil inventories were forecast to have risen by 2.7 million barrels last week. But last week’s shutdown of TC Energy Corp’s 590,000 barrel-per-day Keystone pipeline, a main artery for Canadian heavy crude imports into the United States, following a 9,000-barrel oil spill, could impact the data. The shutdown could have caused supplies at Cushing, Oklahoma, the delivery point for U.S. futures, to have risen only slightly or even decline, which would soften the impact should data show an overall crude build.
Factory activity across the euro zone contracted sharply last month, with the IHS Markit’s manufacturing PMI at 45.9, its 9th month below the 50 mark separating growth from contraction as demand was again stifled by the US trade war with China and uncertainties over Brexit.
Venezuela’s oil exports eased in Oct’19, but surpassed 800 KB/D for a 2nd month in a row, helping to drain an inventory buildup that had forced the OPEC country to cut output, according to documents and data
Iran said on Monday it had launched a new batch of advanced centrifuges to accelerate uranium enrichment, further reducing compliance with the 2015 nuclear deal following the withdrawal of its arch-foe the US.
Naphtha
Asia’s naphtha crack hit 1-1/2 week high of $90.10 a tonne on Monday. Demand for naphtha has been firm despite a spike in premiums in recent weeks.
Buyers have mostly completed buying naphtha for first-half December delivery, while South Korea’s LG Chem started buying naphtha from second-half December delivery last week. The petrochemical maker paid around $15 a tonne premium to Japan quotes on a cost-and-freight (C&F) basis, pegged to a 45-day formula instead of the usual 30 days.
The November crack is lower at – $ 2.45 / bbl.
Gasoline
Asia’s gasoline crack edged down 3 cents to a two-session low of $6.68 a barrel on ample supplies.
The November crack is steady at $ 7.35 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10ppm gasoil rose to $1.08 a barrel to Singapore quotes, up from about a three-week low of 91 cents a barrel on Friday.
Cash differentials for jet fuel were at a discount of 16 cents a barrel to Singapore quotes, compared with a premium of 3 cents a barrel on Friday.
The November crack for 500 ppm Gasoil is steady at $ 15.30 /bbl with the 10 ppm crack at $ 16.30 / bbl. The regrade is at $ 0.10 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
High-sulphur fuel oil (HSFO) crack values for the 380-cst grade sank to record lows on Monday, 58 days ahead of the cap on sulphur content in shipping fuels.
The front-month Singapore 180-cst HSFO crack to Dubai crude sank to a record minus $18.13 a barrel, down from minus $16.40 a barrel in the previous session. Meanwhile, the more actively traded front-month 380-cst barge crack to Brent was at minus $28.90 a barrel on Monday, down from minus $28 on Friday. The front-month barge crack was at a record low of minus $29.67 a barrel on Oct. 21, the data showed.
The November 180 cst crack is lower at -$ 16.35 / bbl with the visco spread at $ 0.90 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh recommendations today.
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.