Crude Oil
Crude Oil prices ended the week strongly in a firm bull grip as speculators expected supplies to become tight going forward as oil producers are expected to extend production limits beyond March 2018. Brent finished at $62.07 /bbl, up $ 1.45 for the day. WTI too gained $ 1.10 cents to settle at $55.64 /bbl.
The market jumped up strongly in the last hour of trading as Baker Hughes reported a drop of 9 rigs to bring the count of active rigs down to 729. This creates the scenario for a slowdown in growth of US crude output.
While Brent gained 2.7% for the week, WTI gained 3.2% for the week. Both markers are at 2 year highs with the outlook seeming to be going further up. Brent has gained nearly 38% from its low in June 2017.
Technical Analysis
Both daily and weekly charts show a strong bullish picture. In the daily charts, the 50 DMA has crossed the 100 DMA from below, a strong bullish indicator. Both charts show prices straining at the top of a rising channel. However, the RSI (not shown here) is showing highly overbought situation on both charts with a hint of bearish divergence on the daily chart.
Supports are seen at $ 60.95, $ 60.00 and $ 59.35 area. Resistances are seen at $ 62.95 $ 63.45, and $ 64.30.
Naphtha
The physical naphtha market remain strong in the backdrop of sustained demand and thin supplies with buying interest for physical cargoes now gradually shifting from first half December to second half December. Among the recent buyers is South Korea’s LG Chem which is learnt to have bought a second-half December delivery naphtha cargo at a premium of approximately $9.50 /MT which is almost double than the premium of $4.75 /MT it had paid earlier for a similar cargo scheduled for first-half December delivery.
The paper crack for November is valued at $ 4.20 /bbl.
Gasoline
The gasoline crack has lost some ground as markets are well supplied and inventories remain adequate across various hubs. In the week to November 2, inventories held independently at the Amsterdam-Rotterdam-Antwerp (ARA) storage and refining hub touched a two-week high of 774,000 MT, after falling to almost its lowest in a year in the previous week.
The November 92 Ron paper crack is valued lower at $ 11.90 /bbl.
Distillates
The gasoil crack continues to slide as stocks remain ample in Asia, with economics to ship cargoes to the west less profitable than a month ago. However the ATF crack has managed to rise, thereby causing the Regrade to cross the $1 /bbl after a very long time.
The Platts Trading window saw three gasoil cash deals getting concluded with Winson Oil being the buyer of all three cargoes.
The November gasoil crack has fallen to $ 11.40 /bbl today. The regrade has moved up smartly to $ 1.40 /bbl.
Fuel Oil
Fuel oil market remain weak on the back of rising inventories across the trading hubs of ARA, Fujairah Oil Industry Zone (FOIZ) and Singapore. Fuel oil stocks in the ARA oil hub rose for a second straight week, up 2 % to 1.356 million MT in the week to November 2. Compared to last year, ARA fuel oil inventories are up a whopping 137 % and are also well above the five-year average of 851,000 MT for this time of year.
The November 180 cst crack is unchanged at -$1.90 / bbl. The visco spread is also continues to be 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