Crude Oil prices retraced a little after two days of major gains. Brent settled 59 cents lower at $63.69 /bbl. WTI lost only 15 cents to settle at $57.20 /bbl.
The power consolidation games in Saudi Arabia may well have spooked market players about stability of supplies. However, the long term impact of the goings on in the country are likely to be limited.
The exaggerated movement in prices was also attributed to escalating tensions between Saudi Arabia and Iran. Saudi Arabia holds Iran responsible for revolutionary or terrorist activities in Yemen.
Over the next few days, we may well be seeing a consolidation of prices and possibly some retracement.
The API data released yesterday showed that crude stocks fell by 1.56 million barrels. While the crude draw was less than expected (-2.7 MB), the product figures were mildly bullish. Gasoline built by 520 KB (+2.2 MB) while distillates drew by 3.1 MB (-2.1 MB).
With naphtha crackers in Asia running at full throttle, demand for physical cargoes continues unabated. The Platts Asian Trading Window remains quiet with no trades being reported since October 26 as sellers appear unwilling to release cargoes in the cash market following tight supplies.
The paper crack for November is valued at $ 4.05 /bbl.
The Asian gasoline market was active with three cash deals being done in the Platts Trading Window yesterday.
In other news, gasoline blended with up to 10 % ethanol has become the top-selling petrol in France, courtesy a tax break that has made the crop-based fuel more attractive to drivers.
The November 92 Ron paper crack is valued lower at $ 11.90 /bbl.
Distillate cracks have risen in the wake of spot demand emerging from China. Cracks were also supported by views that supplies from North Asia are expected to tighten heading into the winter months as refineries will look to maximize heating oil (kerosene) production at the expense of ATF.
In other news, Vietnam is expected to lower the sulphur content of its automotive diesel from 500 ppm to 50ppm from the beginning of 2018. Although this is already delayed from the initial target of 2017, we are of the opinion that the implementation date will be pushed back further as Vietnam’s new Nghi Son refinery is unlikely to commence operations before March 2018.
The November gasoil crack has risen to $ 11.40 /bbl today. The regrade is back at $ 1.40 /bbl.
The fuel oil cracks have fallen as the market remains well supplied.
In other news, Transocean Oil, a marine fuel services group, has lost its licences to operate in Singapore, making it the third provider this year to have its licences revoked amid a crackdown on short deliveries to bunker fuel customers. However, given that Transocean had been notably less active in the market in recent months, its expulsion is likely to have only a limited impact on the supply and price of marine fuels in Singapore.
The November 180 cst crack is lower at -$2.35 / bbl. The visco spread 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