Crude Oil
Oil prices gave up most of Friday’s gains on Monday as details about the first phase of a U.S.-China trade deal did little to assure a quick resolution to the tariff fight. Brent crude shed $ 1.16 to settle at $59.35 a barrel. WTI crude settled $ 1.11 cents lower at $53.59 / bbl.
Initial optimism that the trade negotiations would prove successful faded, as China indicated further discussions were needed and U.S. Treasury Secretary Steven Mnuchin said the next round of tariffs on Chinese imports are still set to take effect on Dec. 15 if a deal has not been reached by then. Existing tariffs remain in place and officials on both sides said much more work was needed before an accord could be agreed.
A deal to smooth the UK’s departure from the EU hung in the balance on Monday after diplomats indicated the bloc wanted more concessions from the UK Prime Minister and said a full agreement was unlikely this week
Venezuelan oil production, already averaging a historic low near 600 KB/D, could quickly plummet below 300 KB/D if the US does not allows a waiver for Chevron and four US oil services companies whose contracts expire next week, analysts told S&P Global Platts.
Naphtha
Asia’s naphtha crack rose for the fifth straight session on Monday to a 14-month high of $109.53 a tonne as the supply crunch persisted and demand stayed strong.
Several crackers have completed their scheduled maintenance but this came at a time when supplies were disrupted last month in Saudi Arabia following attacks on its oil facilities. Refinery maintenance further tightened supplies. Spot premiums on a C&F basis have touched multi-year highs.
The October crack is higher at – $ 1.70 / bbl.
The November crack is at – $ 1.80 / bbl.
Gasoline
Asia’s gasoline crack was at a three-session high of $9.37 a barrel; supported by demand. So far in October, some 567 KT of gasoline and blending components have been delivered from Europe and the Mediterranean to North America.
The October crack is lower at $ 8.75 /bbl
The November crack is at $ 7.45 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s 10ppm gasoil cash premium to Singapore quotes was at its highest in more than a year at $1.30 a barrel on Monday as tight supplies persisted on refinery maintenance and demand.
Heavy maintenance in Asia and Europe have dented supplies. Italy’s Milazzo oil refinery has begun maintenance on a crude distillation unit which would last about 45 days. In Asia, Taiwan’s Formosa, Japan’s JXTG and South Korea’s Incheon Petrochem are among refineries with turnarounds this month.
However, gasoil cracks have taken a tumble today as they are valued significantly lower.
The October crack for 500 ppm Gasoil has collapsed to $ 15.00 /bbl with the 10 ppm crack at $ 16.80 / bbl. The regrade is at – $ 0.00 /bbl
The November crack for 500 ppm Gasoil is at $ 15.70 /bbl with the 10 ppm crack at $ 16.75 / bbl. The regrade is at + $ 0.60 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
High-sulphur fuel oil (HSFO) crack values for the 380-cst grade sank to record lows on Monday, 79 days ahead of the cap on sulphur content in shipping fuels.
The front-month Singapore 380-cst HSFO crack to Dubai crude sank to a record minus $19.28 a barrel , while the November 380-cst barge crack to Brent was at a record low of minus $28.37.
The October 180 cst crack is lower at -$ 15.95 / bbl with the visco spread at $ 1.25 /bbl.
The November 180 cst crack is at -$ 15.80 / bbl with the visco spread at $ 3.20 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
The collapse in the Middle Distillate cracks today means that we can close out a few more positions profitably. No fresh action for 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.