Crude Oil
Oil prices rose on Thursday, buoyed by comments by the head of OPEC that the organization could take action to balance oil markets. Brent crude settled up 78 cents at $59.10 a barrel. WTI crude settled 96 cents higher at $53.55 / bbl.
Saudi Arabia told OPEC its monthly oil output fell by 660,000 bpd in September after major attacks on its energy facilities, while OPEC lowered its 2020 forecast for non-OPEC supply growth. Additionally, Russian President Vladimir Putin plans to discuss stabilizing world oil prices when he visits Saudi Arabia on Monday for talks with Saudi King Salman and Crown Prince Mohammed bin Salman, the Kremlin said.
A round of trade talks between top US and Chinese negotiators went very well, “probably better than expected,” a White House official told Reuters on Thursday. Uncertainty over U.S.-China trade talks resuming on Thursday had previously weighed on the market. Still, there has not been a sustained rally or fall in prices in recent months, though both oil benchmarks are down more than 20% from April peaks.
Naphtha
Asia’s naphtha crack hit a one-year high of $92 a tonne on Thursday while timespread and spot premiums were at more than 6-year highs as a supply crunch deepened.
The timespread between the second-half of November and the second-half of December, rose to $2.50 to$21.50 a tonne, its highest since March 28 2013.
South Korea’s YNCC joined a string of buyers this week purchasing naphtha at around a $30 a tonne premium to Japan quotes on a cost-and-freight (C&F) basis for open-specification naphtha scheduled for second-half November delivery to Yeosu. This is the highest premium it had paid since Feb. 7, 2013 and is triple the $10 a tonne it paid three weeks ago.
South Korea’s GS Caltex, SK Energy and KPIC were looking for cargoes earlier this week. GS Caltex’s premiums were around $25 a tonne to Japan quotes on a C&F basis, while KPIC and SK Energy had paid premiums of more than $25 a tonne and $29 a tonne respectively.
The October crack is higher at – $ 2.25 / bbl.
The November crack is at – $ 2.30 / bbl.
Gasoline
No fresh news on gasoline markets. Light distillate stocks at Singapore dropped by 382 KB to and 11 week low of 9.76 million barrels in the week ended 9th October.
The October crack is lower at $ 9.75 /bbl
The November crack is at $ 8.15 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Singapore’s onshore middle distillates stocks fell by 791 KB to a four-week low of 11.60 million barrels in the week to Wednesday.
Global international passenger demand increased by 3.3% YoY while capacity grew by 2.9% YoY, and load factor moved up by 0.3% to 85.6% according to International Air Transport Association data published Thursday
The October crack for 500 ppm Gasoil is lower at $ 17.40 /bbl with the 10 ppm crack at $ 18.40 / bbl. The regrade is at – $ 0.80 /bbl
The November crack for 500 ppm Gasoil is at $ 17.30 /bbl with the 10 ppm crack at $ 18.30 / bbl. The regrade is at + $ 0.40 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s high-sulphur fuel oil (HSFO) firmed on Thursday, extending gains in the previous session following sharp declines over the past two weeks.
Cash premiums of 380-cst HSFO cargoes rose to $22.37 per tonne above Singapore quotes, up from $19.02 per tonne in the previous session.
Backwardation in the prompt-month Nov/Dec 380-cst time spread firmed to $20 per tonne on Thursday, its highest this week.
Residual fuel oil inventories in the Singapore fuel oil trading and storage hub jumped to a nine-week high 21. 9 million barrels in the week ended Oct. 9.
The October 180 cst crack is higher at -$ 11.95 / bbl with the visco spread at $ 1.55 /bbl.
The November 180 cst crack is at -$ 13.45 / bbl with the visco spread at $ 3.30 /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.
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.