Oil Price Digest 14-Oct-16
Crude Oil
Crude Oil moved in a nervous small band yesterday. The EIA data showed a mixed picture with a build in crude of the order of 4.8 million barrels and a draw in both Gasoline (1.9 Million Barrels) and Distillates (3.7 Million Barrels) Refinery Run rates have dropped to 85.5% their lowest level since October 2013.
Further, the EIA also said it expected demand growth to slow to about 70 KB/day (down from a previous estimate of 200 KB/day). This could be medium term bearish for oil.
Naphtha
Naphtha effected a small recovery today. Traders believe it reflects a demand for gasoline in the US where stocks are dropping. However, supplies remained ample.
The crack seems to firmed up in the prompt to around -$ 1.8 / bbl (Nov)
For those not familiar with the energy industry, depending on quality, Naphtha can be used either as feedstock into petrochemical plants or as a blendstock for gasoline
Gasoline
Gasoline stocks in Singapore dropped by 1.9 million barrels to hit a 13 month low of 10.3 million barrels. This was ascribed to a drop in Taiwanese imports and a drop in volumes coming into Singapore out of South Korea.
The gasoline crack for November firmed up by around 40 cents to around $ 10.8 /bbl
Middle Distillates
The gasoil crack seems to have firmed up as well notwithstanding both the increase in stocks in Singapore to 13.6 Million barrels and increased supply seen coming out of India from Essar and, suprisingly, IOC. With the monsoon having more or less drawn to a close, demand for gasoil should be increasing in that country. Further, Pertamina’s diesel imports this year have drastically reduced over previous years due to decreased demand for transport fuel.
The gasoil crack was at a level of $ 12.6 / bbl, while the jet crack appears to be at a level of around $ 13.0 / bbl
Fuel Oil
Singapore fuel oil inventories dropped by 1.6 Million barrels to 23.7 Million barrels. While this statement appears bullish, sales of marine fuels dropped by 9.4% in September as fewer ships came in to Singapore for refuelling.
The 180 CST Fuel Oil Crack dropped marginally to around -$ 4.31 / bbl
About this blog
This blogpost 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.