Oil resumed its upward trend in the face of bearish data to give a clear sign that the bulls still hope for a good overall compliance. Brent rose by $ 1.46 to $55.10/bbl while WTI rose by $ 1.43 to 52.25 /bbl
Crude Stocks in the US rose by 4.1 million barrels as compared to an expectation of 1.2 million build. Gasoline inventories rose by 5 Million barrels (exp. 1.6) and distillates rose by 8.4 Million barrel (exp. 0.9). All this data is clearly bearish for crude and refining. However, the market picked on the one bullish note in the data i.e. a drop in stocks at Cushing.
Further, the US Dollar also weakened post PEOTUS press conference which was regarded as lacking in any concrete indication of policy to come. This too had a sympathetic effect on crude prices.
The rally had the effect of pulling out weak shorts which lent additional momentum. We need to watch ground realities which still point to excess supply being available.
Persistent Demand is adding strength to the Naphtha market. 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 maintained its strength along with Naphtha. The February crack is still valued at $ 12.3/bbl today
The February gasoil crack picked up to $11.80 /bbl notwithstanding an expected drop in demand from India in the wake of the demoneitisation exercise being carried out there. The Regrade is valued at $ 0.60 /bbl
Fuel Oil eased marginally, with the prospect of sustained high prices weighing down on the market. The February crack is valued at -$1.45 /bbl and the March crack at -$ -2.00 /bbl
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