Crude Oil
Oil prices edged lower on Monday as little progress on U.S.-China trade negotiations kept prices pressured. Brent crude futures fell 33 cents to settle at $62.18 a barrel. WTI crude fell 38 cents to settle at $56.86 a barrel.
Investors are worried about fallout from the 16-month U.S.-China trade war, which has slowed economic growth around the world and prompted analysts to lower forecasts for oil demand, raising concerns that a supply glut could develop in 2020. U.S. President Donald Trump said on Saturday that trade talks with China were moving along “very nicely” but the United States would only make a deal if it was the right one for America. Trump also said there had been incorrect reporting about U.S. willingness to lift tariffs as part of a “phase one” agreement, news of which had boosted markets.
Underlining the impact of the trade war, data over the weekend showed that China’s producer prices fell the most in more than three years in October. Auto sales in China fell for a 16th consecutive month in October, data showed on Monday.
Prices pared losses on Monday after data showed that crude inventories at Cushing, the delivery point for WTI, fell about 1.2 million barrels in the week to Nov. 8. Cushing inventories have grown for five weeks in a row, according to government data, up till its latest report in the week ending Nov. 1. But analysts expected that to switch after the closure on Oct. 30 of the 590 kbpd Keystone Pipeline, an important artery for Canadian heavy crude imports to the U.S Midwest, following an oil spill.
A new oilfield discovered in southwestern Iran is the second largest found in the country, Iran’s oil minister, Bijan Zanganeh, said on Monday, according to SHANA, the ministry’s news site.
Britain’s economy grew at its slowest annual pace in nearly a decade during the three months to September as the global slowdown and Brexit worries hit manufacturing and business investment, official figures showed on Monday.
India’s industrial output fell at the fastest pace in over six years in September, adding to a series of weak indicators that suggests the country’s economic slowdown is deep-rooted and interest rate cuts alone may not be enough to revive growth.
Naphtha
Asia’s naphtha crack edged up to reach a four-session high of $71.63 a tonne on Monday.
Demand for naphtha, however, was mostly muted from North Asia. Eyes were also on ADNOC’s term negotiation where it had pegged offers last week for four naphtha grades for first-half of 2020 shipment at $25 to $29 a tonne premium to its own price formula on a free-on-board (FOB) basis. This was an increase of at least 80% when compared to its contract sealed for the four grades scheduled for 2019 shipment.
The November crack is lower at – $ 3.75 / bbl.
The December crack is at – $ 3.75 / bbl.
Gasoline
Asia’s gasoline crack hit a five-week high of $10.50 a tonne on firm demand. Strong demand from India, Indonesia, the U.S. were giving gasoline a lift. The Middle East could still be buying petrol despite Saudi has restored its oil production following attacks, but this could not be confirmed.
The November crack is higher at $ 8.80 /bbl
The December crack is at $ 7.40 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10ppm sulphur content dropped to 50 cents per barrel to Singapore quotes on Monday, compared with 53 cents per barrel on Friday.
Meanwhile, cash differentials for jet fuel were at a discount of 52 cents per barrel to Singapore quotes on Monday, compared with a 40-cent discount on Friday.
The November crack for 500 ppm Gasoil is steady at $ 13.30 /bbl with the 10 ppm crack at $ 14.30 / bbl. The regrade is at $ 0.70 /bbl
The December crack for 500 ppm Gasoil is at $ 14.30 /bbl with the 10 ppm crack at $ 15.25 / bbl. The regrade is at $ 1.35 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The front-month barge 380-cst high-sulphur fuel oil crack to Brent crude fell to a fresh record low on Monday as demand for the fuel continues to fade.
The December 380-cst barge crack widened its discount to minus $31.09 a barrel, down from minus $29.96 in the previous session. The wider crack discount came despite falling oil prices which fell more than 1% on Monday amid concerns over the prospects of a trade deal between the United States and China, while worries about oversupply also weighed on the market.
The November 180 cst crack is lower at -$ 22.95 / bbl with the visco spread at $ 0.70 /bbl.
The December 180 cst crack is at -$ 22.50 / bbl with the visco spread at $ 1.20 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action 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.