Oil prices rose about 2% on Monday after the new Saudi energy minister, Prince Abdulaziz bin Salman, confirmed expectations that he would stick with his country’s policy of limiting crude output to support prices. Brent crude futures settled $ 1.05 higher at $ 62.59 /bbl. WTI crude futures settled $1.33 higher at $57.85 /bbl.
Prince Abdulaziz said the pillars of Saudi Arabia’s policy would not change and a global deal to cut oil production by 1.2 million barrels per day would survive. He added that the so-called OPEC+ alliance between OPEC and non-member countries including Russia was staying for the long term. On Sunday, the United Arab Emirates’ energy minister Suhail al-Mazrouei said OPEC and non-OPEC producers were “committed” to achieving oil market balance.
China’s crude oil imports gained about 3% in August from a month earlier, customs data showed on Sunday, buoyed by a recovery in refining margins despite a persistent surplus of oil products and tepid demand.
The United States is “very concerned” about China’s purchases of Iranian oil, Dan Brouillette, deputy secretary of the U.S. Department of Energy, said on Monday. U.S. President Donald Trump said on Monday he could meet with Iranian President Hassan Rouhani and that he had no problem with such an encounter.
The US Department of Energy has awarded contracts for nearly 9.88 MB of SPR crude to four US companies, paying an average of $58.99/b and with deliveries set to take place in Oct’19 and Nov’19.
Iran, on Monday, rejected a claim by the Israeli Prime Minister that Tehran had been developing nuclear weapons at a secret site and said he was seeking a pretext for war.
Asia’s naphtha crack was at a five-week high of $25.05 a tonne following a string of demand for the product last week.
Production in Japan, a net importer of naphtha, has been affected by typhoons as Cosmo Oil had to shut two CDUs of capacity totaling 177 kbpd at the Chiba refinery on Monday due to the natural disaster.
But overall demand for naphtha between September 9 and 11 could be slow as traders are expected to be attending the annual APPEC conference in Singapore.
The September crack is lower at – $ 6.40 / bbl.
The October crack is at – $ 5.60 / bbl.
Asia’s gasoline crack rose 61 cents to reach $6.14 a barrel on Monday, the highest since Aug. 29.
The September crack is higher at $ 6.90 /bbl
The October crack is at $ 5.95 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash premiums for 10 ppm gasoil inched lower by a cent to 5 cents a barrel to Singapore quotes on Monday.
Cash premiums for jet fuel were at 28 cents a barrel to Singapore quotes on Monday, the highest since Aug. 1. The jet cash differentials were at a premium of 14 cents a barrel on Friday.
The September crack for 500 ppm Gasoil is higher at $ 16.10 /bbl with the 10 ppm crack at $ 16.95 / bbl. The regrade is at + $ 0.30 /bbl
The October crack for 500 ppm Gasoil is at $ 17.10 /bbl with the 10 ppm crack at $ 17.80 / bbl. The regrade is at + $ 0.25 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s fuel oil crack for 380-cst grade was at a discount of over $20 a tonne on Monday.
The implementation of IMO 2020 could result in buyers ditching 380-cst fuel oil although analysts and traders agree that demand for the dirtier HSFO will not die out completely as ships instal scrubbers.
In Japan, the country’s third-largest refiner Cosmo Oil has started building stocks of very low-sulphur fuel oil (VLSFO) that can be supplied to domestic marine fuel markets from October ahead of IMO 2020, its top executive told Reuters. Cosmo’s decision to start selling VLSFO is part of a growing trend among Asian refiners seeking to capitalize on IMO demand.
The September 180 cst crack is lower at – 4.35 / bbl with the visco spread at $ 0.45 /bbl.
The October 180 cst crack is at – 10.25 / bbl with the visco spread at $ 0.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
As the Cal20 crack for 10ppm Gasoil has crossed $ 19/bbl today, we will hedge a tranche of the same.
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.