Crude Oil
Crude ended the day around 1% higher as Iraqi forces entered the city of Kirkuk and seized it from Kurdish rebels, briefly shutting output down. Brent settled 65 cents higher at $57.82 /bbl while WTI gained 42 cents to settle at $ 51.87 /bbl.
Adding to the geopolitical tension are renewed worries over U.S. sanctions against Iran. U.S. President Donald Trump on Friday refused to certify that Tehran was complying with the accord even though international inspectors say it is. Congress now has 60 days to decide whether to reimpose economic sanctions on Tehran. During the previous round of sanctions, roughly 1 million bpd of Iranian oil was cut off.
While the price gain due to the political uncertainty is clear, what appeared clear from intra day price action was that there is not much upside left just on this news. Attempts to take crude higher failed during both the London and New York trading days.
Market will await further direction from the API data later this evening.
In other news, China through its state-run consortium, comprising, among others, state-owned oil companies and sovereign wealth fund, is offering to buy up to 5 % of Saudi Aramco directly. If Aramco was to take this offer, it would give Saudi Arabia immense flexibility to consider various options for its plan to float the world’s biggest oil producer on the stock market. In a Statement issued last year by Saudi Arabia’s Crown Prince Mohammed bin Salman, he had mentioned that the kingdom was considering listing about 5 % of Aramco in 2018 in a deal that could raise $100 billion, if the company is valued at about $2 trillion as hoped.
Naphtha
The Physical naphtha crack settle eased further yesterday to $ 100.78 / MT as demand for physical cargoes appears to have tapered off.
The paper cracks for November is valued lower at $ 2.90 /bbl.
Gasoline
The physical gasoline crack settled unexpectedly strongly yesterday at $ 10.67 /bbl, its highest in nearly three weeks. The Platts Singapore Trading Window was also very active, witnessing five gasoline cash deals totaling 250,000 bbls, the highest volume traded in a single session since October 4.
The November 92 Ron paper crack is however valued lower at $ 10.50 /bbl.
Distillates
Exports from out of India dampened the cash premiums for gasoil. The Indian refiner BPCL was seen offering a tender for the sale of 50 ppm sulfur gasoil cargo for the first time outside the monsoon season.
The November gasoil crack is unchanged at $ 13.25 /bbl. The regrade is valued at $ 0.20 /bbl.
Fuel Oil
Fuel Oil cracks have managed to edge higher as traders are anticipating lower supplies of the fuel from key exporters including Russia, Iran and Venezuela in the coming months. Russian fuel oil exports for example, sank to just above 3 million MT in August, their lowest since February last year.
The Platts Singapore Trading Window was quiet with no deals being reported.
The November 180 cst crack is valued at -$2.25 / bbl. The visco spread is valued at $ 0.75 /bbl.
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