Oil continued its downward correction yesterday and not even a revision in expectations for cold weather for Jan could stem the fall. Brent fell by $ 1.30 to $53.64/bbl while WTI fell by $ 1.14 to 50.82 /bbl
The drop was attributed to an increase in strength of the US Dollar (one which we did not see), and apparently poor implementation of OPEC cuts. One report which we saw last evening (albeit extremely briefly, it seemed to have been withdrawn almost as soon as published) suggested that Saudi Aramco had cut production only by 150 KBpd. Iraq’s production has risen to record levels and is likely to stay there in January though they did mention they would try and achieve it by February.
Physical Naphtha continued to grow in strength as supplies in February appear significantly less than the demand for material. The February crack is showing a value in excess of $ 1.00 / bbl.
We would recommend commencing hedging February at these levels as also March should one obtain a positive bid for the crack.
The Gasoline crack for February has jumped and is valued at $ 12.3/bbl today
The February gasoil crack picked up marginally to $11.40 /bbl The Regrade is valued at $ 0.50 /bbl
Fuel Oil eased marginally, but just marginally yesterday. The February crack is being valued at -$ 1.4 /bbl while March is at -$ 2.0 /bbl. This is a bit lower than the previous day.
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