Crude Oil
Oil prices were mixed on Monday, pulling back from an early rally after data suggested U.S. crude inventories might build, weighing on the market. Brent crude oil rose 54 cents to $77.37 a barrel after touching a session high of $77.92 a barrel. WTI crude futures settled down 21 cents at $67.54 a barrel.
OPEC will discuss long-term cooperation in Algeria later this month, according to Russia’s energy minister. He added that cooperation is possible “without setting specific quotas” on production. The minister also confirmed he will meet the US Secretary of State in Moscow on Thursday, and also meet with Chinese officials today to discuss joint projects and natural gas supplies.
Libya’s NOC successfully recaptured control of their headquarters after an attack by gunmen in Tripoli. The NOC also says that oil operations were unaffected by the incident.
Naphtha
Asia’s naphtha inter-month spread was flat on Monday in reflection of weaker fundamentals as ample supplies weighed. Western cargoes arriving in Asia this month are expected to exceed 1.55 million tonnes based on Thomson Reuters Oil Research data on Sept. 10. This would be the highest monthly volume to arrive from the West in more than five months. The market is showing signs of flipping into contango after two weeks of backwardation.
The balance September crack is lower at -$ 0.85 /bbl. The October crack is at -$ 0.15 /bbl
Gasoline
Asia’s gasoline crack eased 2.2 percent to a two-session low of $8.34 a barrel.
The balance September crack has crashed to $ 9.15 /bbl. The October crack is at $ 8.45 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for Jet fuel narrowed discounts to 30 cents a barrel to Singapore quotes on Monday, compared with a 31 cent discount on Friday. The jet fuel market is a little slow at the moment, but overall sentiment is on the bullish side because fourth-quarter demand is around the corner and supply is relatively tight.
Meanwhile, cash premiums for 10ppm gasoil edged lower on Monday to 57 cents a barrel to Singapore quotes, partly hurt by weaker bids and offers in the physical market. The prompt-month time spread, however, widened its backwardated structure and prevented a wider slip in cash differentials.
The balance September crack has risen to $ 15.75 / bbl with the 10 ppm crack at $ 16.55 /bbl. The regrade is higher at – $ 0.55 /bbl.
The October crack is at $ 15.65 / bbl with the 10 ppm crack at $ 16.45 /bbl. The regrade is at – $ 0.40 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month time spread edged slightly higher on Monday in a sign of stabilising market sentiment after steady losses over the past month. The 380-cst Oct/Nov time spread was trading at about $4 a tonne, up from about $3.70 a tonne on Friday.
Higher arbitrage supplies into Asia have weighed on market sentiment since around mid-August, but steady demand and lower regional output due to refinery maintenance is expected to limit further losses.
The balance September180 cst crack is lower at -$ 5.05 / bbl with the visco spread at $ 0.75 /bbl.
The October 180 cst crack is at -$ 4.70 / bbl with the visco spread at $ 1.10 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
Nothing fresh to report 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.