Crude Oil
Crude continued its bearish slide, but the frightfully low levels Brent saw ($ 43.57/bbl) seemed to have kicked in some buying as traders saw value. Brent finally settled at $ 44.43 /bbl a drop of 32 cents / bbl. WTI settled at $43.32 /bbl, 19 cents lower on the day.
Analysts believe that immediate support for crude can only come from a concerted effort by OPEC to rein in production.
We need to see how this unfolds.
Naphtha
The Naphtha market eased as low freight rates has opened the arbitrage for cargoes to come in from the west. Asia is expected to receive between 1 and 1.3 million tonnes of naphtha from the West in December. These cargoes as expected to be rich in Naphthenes and Aromatics making them more suitable for petrochemical use rather than conversion to gasoline.
Gasoline
The Gasoline crack for December strengthened marginally to around $10.95 / bbl for December in line with our commentary yesterday (For the immediate future, demand is expected to prop up the crack as the Balikpapan refinery heads into turn around and import demand arising from India). The market today has returned to contango for Dec-Jan though.
Middle Distillates
Gasoil continued to soften today as the crack slid below $ 12.00 /bbl. Term contracts for both gasoil and jet were seen being finalized. The levels were more or less around 2016 levels with 10 ppm sulfur being cheaper by 15 cents and 500 ppm sulfur being more expensive by around 35 cents.
The jet term contract was traded at parity to MOPS, about 10 cents cheaper than 2016.
We would continue to recommend the regrade for January as a good sell.
Fuel Oil
The fuel oil crack eased very marginally. The value of the December crack is -$ 1.55 /bbl. i.e. lower by around 5 cents.
The market shows good demand but not procurement at any price. Nobody ventured near an offer which was quite far away from aggressive bids in the Platts window.
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.