Crude Oil

Oil rose on Friday to its highest in nearly three months as investors cheered progress in resolving the U.S.-China trade dispute. Brent crude  settled $1.02 higher at $65.22 a barrel, and WTI oil  rose 89 cents to $60.07 a barrel.

Both contracts settled at their highest since Sept. 16, up a little over 1% for the week.

China has agreed to buy $32 billion of additional U.S. farm products over two years as part of a phase-one trade pact.

A drop in the U.S. dollar coupled with a strong pound also helped boost commodities.

Japan’s factory activity extended its fall in Dec’19, with the Jibun Bank Flash Japan Manufacturing PMI edging down to 48.8 from 48.9 the previous month, as a prolonged decline in output and new orders threatened to tip the economy into contraction in the current quarter.

U.S. retail sales rose less than expected in November as Americans cut discretionary spending.

Oil prices did not move much when a U.S. House of Representatives committee took Trump to the brink of impeachment, approving two charges stemming from his efforts to pressure Ukraine to investigate Democratic political rival Joe Biden.

US energy firms added rigs for the first time in eight weeks, adding 4 rigs to total 667 (-206 YoY) even as producers follow through on plans to reduce spending on new drilling, according to Baker Hughes.


Asia’s naphtha crack fell 6.8% from a near two-year high to a five-session low of $116.15 a tonne on Friday as spot trades were mostly muted following a string of recent purchases.

Buyers however were increasingly concerned by the rising naphtha spot premiums caused by a persistent supply crunch as they were unable to pass down the costs. Naphtha is a feedstock for plastics. Typically, plastics prices have to be at $400 to $450 above naphtha to reach a break-even point. At present, plastics cost between $800 and $900 a tonne on a cost-and-freight (C&F) Southeast Asia basis, depending on the grades, while naphtha is above $600 a tonne this week. Poor petrochemical margins have fuelled talks of run cuts at crackers which process naphtha into petrochemicals.

The December crack is lower at – $ 3.55 / bbl.

The January crack is at – $ 3.65 / bbl.


No fresh news on the Gasoline markets. ARA Gasoline stocks rose by 81 KT to 845 KT for the week ended 12th December.

The December crack is lower at $ 5.55 /bbl

The January crack is at $ 6.20 /bbl

Click Here for a graphical depiction of Global Gasoline stocks by region.


Asia’s jet fuel cash differential to Singapore quotes remained at a premium after flipping to the positive zone for the first time in about 1-1/2 months in the previous session due to seasonal peak demand. The jet fuel cash differential to Singapore quotes ended the week at 40 cents premiums, highest in over a year. Jet fuel/kerosene is used as a heating commodity in North Asia, predominantly in Japan.

ARA Gasoil stocks rose by 66 KT to a four week high of 2.41 million tonnes.

The December crack for 500 ppm Gasoil is higher at $ 12.60 /bbl with the 10 ppm crack at $ 13.55 / bbl. The regrade is at   $ 0.20 /bbl 

The January crack for 500 ppm Gasoil is at $ 13.85 /bbl with the 10 ppm crack at $ 14.65 / bbl. The regrade is at   $ 0.75 /bbl 

Click Here for a graphical depiction of Global Distillate stocks by region.

Fuel Oil

Asia’s cash premium and front-month time spread for 380-cst high-sulphur fuel oil (HSFO) firmed on Friday, backed by tight supplies of the fuel as suppliers switch to low-sulphur alternatives ahead of the IMO 2020 global cap from January.

The cash premium for 380-cst HSFO was at a one-month high of $5.62 per tonne to Singapore quotes, up from $2.85 a tonne in the previous session. The 380-cst HSFO Jan/Feb time spread was also higher at a two-week high of $3 a tonne, up from $1.50 a tonne on Thursday, Refinitiv Eikon data showed.

ARA fuel oil inventories rose by 78 KT to a 5 week high of 1.01 Million tonnes.

The December 180 cst crack is lower at -$  22.05 / bbl with the visco spread at  $ 1.45 /bbl.

The January 180 cst crack is at -$  20.40 / bbl with the visco spread at  $ 2.40 /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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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