Oil Price Digest 12-Oct-16
Crude Oil prices are moving up and down on the proposed oil cut. Today its flow was downwards because
- Even if people agree to cut supply, it is unlikely that there will be any shortfall felt in supply before alternate supply kicks in. Rosneft clearly stated it would not cut oil production.
- Doubts about compliance with cuts continue and with good reason
- There must be an element of profit taking in the wake of such a steep rise (13% in the last two weeks)
Naptha prices are weakening. While the weaker prices seem to be attracting buyers, supplies are still plentiful. The crack has weakened considerably today lower by around 40-50 c
The gasoline market appears to be showing strength arising from demand both in Asia as well as outside. Pakistan is looking to buy 500 KT for delivery over November / December and January. The gasoline crack has strengthened marginally.
Gasoil firmed up apparently because Egypt issued a number of buy tenders. Egypt had to do this because Saudi Aramco has stopped supply to Egypt though the whens, whys and how longs is not known. Market trades were seen at levels stronger than anticipated
The gasoil crack appears to have firmed up by 15 odd cents as a result of this action.
Jet prices could not keep up with this strength resulting in a marginal softening of the regrade.
The fuel oil East-West arbitrage has increased further which would make it easier to ship cargoes across to Singapore. Cracks however remain steady.