Crude Oil

Oil rose above $62 a barrel on Thursday after China hinted at progress towards a trade deal with the United States. Brent crude  futures rose 55 cents to settle at $62.29 a barrel. WTI crude  futures ended 80 cents higher at $57.15 a barrel.

China and the United States have agreed in the past two weeks to cancel tariffs in different phases, the Chinese commerce ministry said on Thursday without giving a timeline. Beijing’s comments boosted market sentiment, which had also been ruffled by Wednesday’s U.S. government supply report showing crude inventories rose last week by 7.9 million barrels, much more than expected by analysts.

OPEC Secretary-General Mohammad Barkindo said this week he was more optimistic about the outlook for 2020 because of developments on trade disputes, appearing to downplay any need to cut output more deeply. Still, doubts about a trade deal could resurface.

The bigger rise in WTI yesterday cut Brent’s premium over the U.S. benchmark  to its smallest since mid September.


Asia’s naphtha extended its substantial losses for a third straight session on Thursday, this time falling by 10% to hit a five-week low of $62.70 a tonne as weak petrochemical margins weighed on the market.

Between Monday and Thursday, the naphtha crack has lost 30.4%, Reuters data showed.

There was talk of run cuts at one of Asia’s smallest cracker by capacity, but this could not be directly confirmed. Crackers use mainly naphtha as feedstock to produce petrochemical products, with some using LPG to replace a small portion of the former. Ample supplies of LPG have enabled these crackers to continue replacing some of their naphtha even into the winter months. Traditionally, LPG is more expensive towards the fourth quarter as it is also used for heating.

The November crack is lower at – $ 3.90 / bbl.


No fresh news in the gasoline markets.

Light distillate stocks in Fujairah also dropped by 109 kb to 5.92 million barrels.

The November crack is higher at $ 8.35 /bbl

Click Here for a graphical depiction of Global Gasoline stocks by region.


Cash premiums for gasoil with 10ppm sulphur content  slipped for a third consecutive session on Thursday to 60 cents per barrel to Singapore quotes, down from 70 cents per barrel on Wednesday. Cracks for the benchmark gasoil grade  fell to $16.19 per barrel over Dubai crude on Thursday, compared with $16.46 per barrel on Wednesday. 

Cash discounts for jet fuel  widened to 40 cents per barrel to Singapore quotes on Thursday, a level not seen since mid-May. The differentials were at a discount of 30 cents per barrel a day earlier. The jet cash differentials are currently at their lowest levels for this time of the year since 2016.

Middle distillate inventories in Fujairah jumped by 1.07 million barrels to 3.09 million barrels in the week ended 5th November.

The November crack for 500 ppm Gasoil has collapsed to $ 13.65 /bbl with the 10 ppm crack at $ 14.65 / bbl. The regrade is at   $ 0.35 /bbl 

Click Here for a graphical depiction of Global Distillate stocks by region.

Fuel Oil

Cash premiums for Asia’s 380-cst HSFO fell to near three-week lows on Thursday, as weaker deal values and lower supplier offers weighed on the cash differential amid a gradual decline in demand for high-sulphur bunkers. 380-cst cash premiums  fell to $32.13 per tonne above Singapore quotes, down from $35.11 per tonne in the previous session and its lowest since Oct. 18.

Reflecting weaker sentiment, backwardation in the prompt-month Nov/Dec 380-cst time spread also narrowed by $2.25 per tonne to a one-week low premium of $21 a tonne on Thursday.

Meanwhile, residual fuel oil inventories in the Singapore fuel oil trading and storage hub fell to a two-week low in the week to Nov. 6 despite steady net imports of the fuel, official data shows.

The November 180 cst crack is lower at -$  18.75 / bbl with the visco spread at  $ 0.80 /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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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