Crude Oil
Oil prices steadied on Monday, supported by geopolitical tension over the disappearance of a Saudi journalist that has stoked worries about supplies from Riyadh, but weighed by concern over long-term demand outlook. Brent crude futures for December delivery rose 35 cents to settle at $80.78 a barrel. WTI crude futures rose 44 cents to settle at $71.78 a barrel.
US shale oil output is expected to climb by 0.1 mb/d to 7.7 mb/d in November, according to the EIA in its latest monthly report. The increase mostly stems from the Permian basin, where output is expected to grow 0.05 mb/d.
Iraq plans to increase its crude exports to 4 mb/d in 1Q-2019, up almost 0.4 mb/d from current levels, according to the oil minister on Monday. Federal exports are estimated to have averaged 3.6 mb/ d in October so far, while the Kurdistan Regional Government is also said to have loaded 0.37 mb/d from Ceyhan in September.
Naphtha
Asia’s naphtha crack recovered slightly to reach a two-session high of $79.05 a tonne but fundamentals remained weak due to abundant supplies which were highlighted by falling spot prices.
The November crack is higher at – $ 2.20 / bbl
Gasoline
Asia’s gasoline crack dropped nearly 20 percent on Monday to a more than three-month low of $5.39 a barrel, under pressure from plentiful supplies and weaker demand in the region.
Petrol sales in India in September, for example, had the smallest rise in four months as record high pump prices dented demand. The earlier-than-expected return of a gasoline-making unit at Abu Dhabi National Oil Company’s (ADNOC) Ruwais oil refinery could also add to supplies.
The November crack is at $ 5.40 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Asia’s jet fuel cash differential to Singapore benchmark prices flipped on Monday into a slight premium of 2 cents for the first time since Aug. 10, while the 10ppm cash premium hit its highest this year at $1.05 a barrel due to tighter supplies.
The November crack is lower at $ 16.95 /bbl with the 10 ppm crack at $ 16.75 /bbl. The regrade is steady at $ 0.35 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 380-cst high sulphur fuel oil time spread slipped to its narrowest in two weeks on Monday, reflecting easing concerns about tight fuel oil supplies over the near term. The Oct/Nov time spread for 380-cst fuel oil narrowed its backwardation to $6.25 a tonne, down from $6.50 a tonne on Friday and its narrowest since Oct. 1.
The November 180 cst crack has jumped to -$ 0.90 / bbl with the visco spread at $ 1.30 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
The Fuel Oil crack looks exceptionally strong in the front month. We shall add a third tranche of hedge for the November crack at the current value of -$ 0.90 /bbl
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.