Crude Oil
Oil prices settled more or less unchanged on Monday after staying up most of the day. Brent crude settled down 2 cents at $58.35 a barrel, after hitting a high of $59.68. WTI crude settled at $52.75 after hitting a high of $54.06.
Hopes of progress in U.S.-China trade talks had helped lift prices earlier in the session. U.S. and Chinese officials meet in Washington on Thursday and Friday in a fresh effort to work out a deal, which U.S. President Donald Trump said his administration had a “very good chance” of achieving. But China’s Commerce Ministry tempered expectations when it said it could reach a trade agreement on issues that both the United States and China already agree on, but that it will set a timetable for more difficult issues to be worked out next year. The US chief economic adviser on Monday said the administration had begun studying US investor protections in China, but that delisting Chinese companies traded on US exchanges “is not on the table.”
German industrial orders fell by 0.6% MoM in Aug’19, more than expected on weaker domestic demand, data showed on Monday, adding to signs that a manufacturing slump is pushing Europe’s largest economy into recession.
China’s services sector grew at its slowest pace in 7 months in September despite a strong increase in new orders, as operating expenses continued to rise at the end of Q3. The Caixin/Markit services PMI fell to 51.3 last month, the weakest since Feb’19.
Naphtha
Asia’s naphtha crack was unchanged at $66.58 a tonne, having hit a nine-month high on Friday as supplies tightened because of strong demand.
Saudi Aramco on Friday scooped up a total of 70 KT of naphtha from Indian Oil Corp for October and November loading from Chennai at premiums above $40 a tonne, levels not seen since 2013. This brought Aramco’s total spot purchases from India for October-November loading from Vizag and Chennai to 130 KT since the Sept. 14 attacks on Saudi facilities.
The October crack is higher at – $ 4.10 / bbl.
Gasoline
No fresh news on gasoline markets.
The October crack is steady at $ 9.05 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s 10ppm gasoil cash premium to Singapore quotes rose 5 cents to an 11-month high of 85 cents a barrel, supported by firm demand and tighter supplies.
Refinery maintenance in Asia and Europe came together with recent attacks on Saudi oil facilities and upcoming changes to shipping fuel regulation to lift the value of low sulphur gasoil.
The October crack for 500 ppm Gasoil is higher at $ 16.70 /bbl with the 10 ppm crack at $ 17.70 / bbl. The regrade is at + $ 0.30 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s cash premiums for 180-cst and 380-cst HSFO cargoes fell for the seventh straight session on Monday, as the marine fuels industry ploughs ahead with its transition to lower sulphur bunkers ahead of the 2020 implementation deadline.
Cash premiums of 380-cst HSFO cargoes fell to $21.38 per tonne above Singapore quotes, down from $29.19 per tonne in the previous session, and down from $50.06 a tonne in the week before.
180-cst cash premiums fell to $19.50 per tonne, lower from $22.76 per tonne on Friday, and down from $45 a tonne on Monday.
Both cash premiums are at near 1-1/2 month lows. Reflecting weaker demand sentiment, backwardation in the front-month Nov/Dec 380-cst time spread also narrowed to a near two-month low premium of $14 a tonne on Monday, down from $23 a tonne on Friday.
The October 180 cst crack is lower at -$ 16.10 / bbl with the visco spread at $ 0.85 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action for 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.
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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.