Oil prices fell more than 2 percent on Monday on signs of oversupply in the United States and investor concern over global economic growth. Brent crude oil fell 67 cents to settle at $59.61 a barrel after dropping to a session low of $58.83 a barrel. U.S. crude dropped $1.32 to end the session at $49.88 a barrel.
U.S. crude futures settled below $50 for the first time since October 2017 making a session low of $ 49.09. Brent too made a session low of below $ 59.00 /bbl.
U.S. crude futures fell after inventories at the storage hub of Cushing, Oklahoma, rose by more than 1 million barrels from Dec. 11 to 14. Increasing concerns about weakening growth in major markets such as China and Europe have also dampened the mood in oil and other asset classes.
Broad stock market declines in Europe and the United States on Monday dragged equity markets lower around the world, adding to a sell-off that has sent global shares near 17-month lows.
Oil production from seven major U.S. shale basins is expected to surpass 8 million barrels per day (bpd) by the end of the year, the U.S. Energy Information Administration said in a monthly report on Monday. As inventories at Cushing rise, front-month U.S. crude futures traded as much as 33 cents below the second month , the widest level of contango since October 2017.
Russian oil output has been at a record high of 11.42 million barrels per day (bpd) in December so far, an industry source familiar with the data told Reuters.
Chinese oil refinery throughput in November fell from October, suggesting an easing in oil demand, while the country’s industrial output rose the least in nearly three years as the economy continued to lose momentum.
Asia’s naphtha crack shrank to a two-session low of $49.43 a tonne on Monday after hitting a 1-1/2 month high last Friday.
The current crack level was at least 20 percent higher than the average of $40.52 for the first half of December as possible delays in cargoes arriving into Asia from the west gave the market some support for now.
Demand for January cargoes have also soaked up some of the surplus supply, helping spot prices to improve although they remained at discounted levels.
The January crack is higher at -$ 3.05 /bbl
No fresh news on the Gasoline market today.
The January crack is lower at $ 1.80 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash discounts for 10ppm gasoil narrowed to 55 cents a barrel to Singapore quotes, from a discount of 58 cents a barrel on Friday. This was even as crack margins fell, reflecting a coming together of cash and paper prices.
Cash differentials for Jet were at a discount of $1.11 a barrel to Singapore quotes on Monday, the widest discounts since September 2015. They were at a discount of $1.07 a barrel on Friday. The jet cash differentials are at their lowest levels for this time of the year in the last nine years.
The January crack is lower at $ 12.85 /bbl with the 10 ppm crack at $ 13.80 /bbl. The regrade is higher at $ 2.50 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s 180-cst fuel oil crack extended losses on Monday to hit a discount close to $2 a barrel on Monday, making this the lowest level since Oct. 11 on thin buying interest and ample supplies.
Of the 12 deals traded in the Singapore cash market, one was on 180-cst grade with the remaining on 380-cst fuel oil. Singapore’s firm Hin Leong was the buyer of all 12 cargoes of fuel oil. The reasons behind Hin Leong’s buying spree were unclear.
The outright prices of the 380-cst grade on Monday at less than $362 a tonne was its lowest since March.
The January 180 cst crack has crashed to -$ 2.15 / bbl with the visco spread at $ 0.35 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
We have closed out a few more sessions today as both Fuel Oil and Middle Distillates cracks eased. Our active recommendations has less red than it ever did for a long time.
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.