Crude Oil
Oil prices gained nearly 1% on Thursday on hopes that the United States and China were close to reaching a deal on the ongoing trade dispute. Brent crude settled 48 cents higher at $64.20 a barrel, and WTI oil rose 42 cents to $59.18 a barrel.
Trump tweeted on Thursday that the United States was very close to a big deal with China amid reports that the country was considering a delay or possible cancellation of tariffs scheduled to go into effect on Dec. 15. While prices received a fresh boost immediately following the tweet, futures eased somewhat during the session. Later on Thursday, a source briefed on talks between the two nations said the United States has reached a “phase-one” trade deal in principle with China, adding that a statement from the White House was expected soon.
The International Energy Agency (IEA) predicted a sharp rise in global inventories despite the OPEC agreement, noting expectations for lower output by the United States and other non-OPEC countries.Global fuel oil demand will average 6.148 MB/D in 2020, a 4.6% drop from 6.440 MB/D in 2019, the IEA said in its Dec’19 report published Thursday.
Oil prices were also supported by the U.S. Federal Reserve keeping interest rates unchanged at a meeting on Wednesday. The European Central Bank also kept its ultra-easy monetary policy unchanged on Thursday, even keeping the door open to more stimulus.
Japanese big manufacturers’ business mood was at its bleakest in nearly seven years in the Q419, according to the BoJ’s tankan quarterly survey, as the US-China trade war and soft global demand weighed on the export-reliant economy.
Naphtha
No fresh news on the naphtha markets.
The December crack is lower at – $ 2.75 / bbl.
The January crack is at – $ 3.10 / bbl.
Gasoline
Asia’s gasoline crack tumbled 16.48% on Thursday to a three-month low of $5.88 a barrel due to high stockpiles. Singapore onshore light distillates stocks surged 1.67 million barrels to more than a 7-month high of nearly 13 million barrels in the week to Thursday, data from Enterprise Singapore showed.
China exports of gasoline has remained high, with more than 100 KT being shipped to Singapore between Dec. 5 and Dec. 11, the data showed.
The December crack is lower at $ 6.00 /bbl
The January crack is at $ 6.20 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s 10ppm gasoil profit margin eased to $14.10 a barrel on Thursday as oil prices rose.
Singapore onshore middle distillate stocks fell by 132 KB to reach a four-week low of 10.7 million barrels in the week to Dec. 11, data from Enterprise Singapore showed.
India’s Diesel consumption, which accounts for about two-fifths of India’s overall refined fuel demand, reversed the declining trend of the previous three months and rose by 8.8% to 7.55 million tonnes in November from a year earlier, also its highest rate since January 2018, data from the Petroleum Planning and Analysis Cell showed.
The December crack for 500 ppm Gasoil is at $ 12.40 /bbl with the 10 ppm crack at $ 13.35 / bbl. The regrade is at $ 0.20 /bbl
The January crack for 500 ppm Gasoil is at $ 13.70 /bbl with the 10 ppm crack at $ 14.50 / bbl. The regrade is at $ 0.55 /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 (HSFO) margin over Brent crude, or crack, on Thursday climbed to a 1-1/2 month high, amid tightening supplies of the fuel. But much upside potential is limited over the near term as a crashing demand due to looming global shipping rules that the cap sulphur content of marine to 0.5% starting January 2020.
The January 380-cst barge crack narrowed its discount to minus $26.61 per barrel, down from minus $27.70 in the previous session, data from Refinitiv Eikon showed.
Singapore’s residual fuel oil inventories fell from the previous week’s more than five-month high to 21.37 million barrels in the week to Dec. 11, official data showed on Thursday.
The December 180 cst crack is higher at -$ 21.75 / bbl with the visco spread at $ 1.60 /bbl.
The January 180 cst crack is at -$ 20.10 / bbl with the visco spread at $ 2.05 /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.