Crude Oil

Oil futures edged higher on Tuesday after paring most of their gains as stock markets turned negative on worries about a possible U.S. government shutdown. After a strong start, Brent futures  ended just 23 cents higher at $60.20 a barrel. WTI futures rose 65 cents to $51.65.

 U.S. stock markets pulled back after President Donald Trump threatened to shut down the federal government over funding for a wall along the U.S.-Mexico border.

Prices had risen over $1 a barrel earlier in the session after Libya’s National Oil Company (NOC) declared a force majeure on exports from the country’s biggest oilfield, which was seized last weekend by a militia group. NOC said on Monday that the shutdown of the El Sharara oilfield would result in a production loss of 315,000 barrels per day (bpd), and an additional loss of 73,000 bpd at the El Feel oilfield.

Also adding pressure to the market, was Russia’s slower-than-expected planned cuts in production as part of an OPEC-led deal agreed last week to curb output by a joint 1.2 million bpd from January to shore up prices. Russia said on Tuesday it planned to cut oil output by just 50,000 to 60,000 bpd in January, as it gradually builds to an agreed cut of 220,000 bpd. The reduction by the OPEC+ group may not be deep enough to restore balance to the market especially after the U.S. government confirmed its forecast that the United States would end this year as the new top producing nation.

API Data


The API reported a massive draw in crude which could possibly be a bit of catch up with last week’s DOE reported draw. However, not only did gasoline also show a solid draw, but distillates also built less than expected which means that the data is overall supportive for crude prices.


The naphtha crack slipped to a two-session low of $37.25 a tonne, down from $39.95 a tonne in the previous session. For now there appears to be nothing to do but wait for markets to turn.

The December crack is lower at -$ 4.50 /bbl


The Singapore 92 RON gasoline crack against Brent crude slipped to a two-session low of minus $0.87 a barrel, down from a premium of $0.05 a barrel on Friday. Few signs of an easing supply glut over the near term and higher crude oil prices on Friday weighed on sentiment.

The December crack is lower at $ 1.00 /bbl

Click Here for a graphical depiction of Global Gasoline stocks by region.


Cash discounts for 10ppm gasoil  widened by 10 cents to 70 cents a barrel to Singapore quotes on Tuesday, as the December/January time spread widened its contango structure. This is a new record low beating the discount of 65 cents a barrel on Friday.

Asia’s cash discounts for jet fuel narrowed on Tuesday but stayed close to their widest levels for this time of the year in nine years as abundant supplies outpaced demand from the region’s booming aviation sector. Cash discounts for jet fuel  were at $1 a barrel to Singapore quotes on Tuesday, compared with a discount of $1.06 a barrel on Monday.

The weakness in jet fuel markets is due to slow winter heating demand for kerosene as the region is yet to see a cold snap this year. Temperatures in Tokyo, Beijing and Shanghai are expected to stay well above normal next week, while temperatures remain mostly warmer than normal in Seoul.

The regrade , the price spread between jet fuel and gasoil, for January stood at $2.07 a barrel on Tuesday. This level, as we have mentioned before, is unusually high and spurs the production of jet. 

The December crack has crashed to $ 12.25 /bbl with the 10 ppm crack at $ 13.00 /bbl. The regrade is steady at $ 2.10 /bbl

Click Here for a graphical depiction of Global Distillate stocks by region.

Fuel Oil

Buying interest for physical cargoes of 380-cst high-sulphur fuel oil (HSFO) intensified on Tuesday, after muted trade in the previous two sessions, lifting cash premiums of the fuel to a three-session high.

The 380-cst fuel oil cash premium jumped to $4.90 a tonne to Singapore quotes, up from $4.66 a tonne on Monday and up from a near three-month low of $4.25 a tonne on Friday. By contrast, trade activity in the paper market was muted, with time spreads and 380-cst barge crack values near their previous close.

The December 180 cst crack has dropped to +$ 1.20 / bbl with the visco spread at $ 0.55 /bbl

Click Here for a graphical depiction of Fuel Oil stocks by region.

Hedge Recommendations

Both, fuel oil and distillate cracks have eased a lot 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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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