Crude Oil
Oil prices rose more than 1% on Tuesday on hopes that Washington could roll back some tariffs on Chinese imports as a signal to the end of the trade war. Brent crude futures rose 83 cents to settle at $62.96 a barrel. WTI crude futures ended 69 cents higher at $57.23 a barrel.
China is pushing U.S. President Donald Trump to remove more tariffs imposed in September as part of a so-called Phase 1 deal, which would ease the economic impact of the trade dispute between the world’s two biggest oil consumers.
OPEC Secretary-General Mohammad Barkindo said the oil market outlook for 2020 may be brighter than previously forecast, appearing to downplay any need for deeper production cuts.
OPEC’s production of crude oil and other liquids is expected to decline to 32.8 million bpd by 2024, the group said in its 2019 World Oil Outlook. Meanwhile, Asia’s oil demand growth is expected to more than double to 815 kbpd in 2020.
Activity in Japan’s services sector shrank for the first time in three years in Oct’19, with the final Jibun Bank Japan Services PMI dropping to 49.7 as a powerful typhoon and a sales tax hike weighed on demand, raising a red flag for the world’s third-largest economy.
Iran will start injecting uranium gas into centrifuges at its underground Fordow enrichment facility, the Iranian President said on Tuesday, a highly symbolic breach that will complicate European efforts to salvage Tehran’s nuclear deal.
The Trump administration said on Tuesday it will be auctioning off nearly 4 million acres (1.6 million hectares) of land in Arctic Alaska for oil development next month, and it is promising much more territory will be open to development in the future.
API data
In the United States, crude inventories rose 4.3 million barrels last week to 440.5 million, data from industry group the American Petroleum Institute showed late Tuesday, nearly triple analysts’ forecasts for a 1.5 million-barrel build. Official U.S. government data is due to be released on Wednesday.
Naphtha
Asia’s naphtha crack fell to a two-session low of $80.98 a tonne on Tuesday.
Buyers in South Korea, with the exception of South LG Chem, have yet to emerge to buy cargoes for second-half December delivery this week. Middle Eastern naphtha for October shipment was seen mostly stable on-month at up to 2.7 million tonnes. The steady supplies was a result of an increase supplies from Qatar offsetting the fall in volumes from Saudi Arabia following a Sept. 14 attack on its oil fields.
The November crack is lower at – $ 3.05 / bbl.
Gasoline
Asia’s gasoline crack recovered from a two-session low to $6.93 a barrel as pockets of demand combated ample stocks, led mainly by growing supplies in China.
The November crack is lower at $ 7.10 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10ppm gasoil were at 94 cents per barrel to Singapore quotes on Tuesday, compared with $1.08 per barrel a day earlier. The November/December time spread traded at a premium of 80 cents per barrel on Tuesday, 21 cents lower from the previous session.
Cash differentials for jet fuel were at a discount of 13 cents per barrel to Singapore quotes on Tuesday, compared with 16-cent discount a day earlier. The physical jet fuel market in the Singapore trade window remained muted with no bids or deals on Tuesday.
The November crack for 500 ppm Gasoil is lower at $ 14.75 /bbl with the 10 ppm crack at $ 15.75 / bbl. The regrade is at $ 0.40 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month 380-cst high-sulphur fuel oil (HSFO) time spread slipped to its lowest in more than five-months on Tuesday as the marine fuels market ploughs on with a transition to lower sulphur fuels.
Similarly, the front-month 180-cst HSFO crack to Dubai crude hit a record low for a second session at minus $19.14 a barrel.
The November 180 cst crack is lower at -$ 17.60 / bbl with the visco spread at $ 0.75 /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.