Crude oil continued downward on Friday as well which, as we had suggested on Friday, may be an indication of liquidation of strategic long positions. For the week, crude declined by 9%, one of its largest weekly drops in this year.
The Brent contract settled at $45.58 while WTI settled at $ 44.07 / bbl. This is the lowest level since September for both contracts.
Weak trading fundamentals continue to concern traders, primarily a glut of output along high stock levels. The rigs count in the US also rose, making the 20th rise in 23 weeks.
Naphtha continues to be strong as strong ethylene margins make running crackers at full capacity worthwhile aided by the situation in the US.
However, the Colonial pipeline is expected to have resumed operations on Sunday afternoon. which may cap both Naphtha and gasoline.
The Naphtha crack is showing a value in excess of $2 / bbl for both Nov and Dec.
Gasoline too continues to be strong as Indonesia commences its term negotiations for 2017.
With the Colonial pipeline resuming operations soon, this market may well be capped in Asia as stocks go on increasing.
Currently, the gasoline crack is trading around a value of $ 12.00 / bbl for December.
Term product deals for 2017 are being finalized.
The gasoil crack seems to have eased marginally at just under $ 14/ bbl for November. The Jet crack seems to have marginally strengthened for January.
The November fuel oil crack is showing a level of -$0.15 / bbl while the December crack is at -$ 1.2 / bbl.
As the value of the product comes up to the level of Dubai, even as the value of the distillate crack drops, it would not be unreasonable to expect a greater supply of the product going forward.
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.