Oil prices were little changed on Monday as the market weighed deepening trade tension between the U.S. and China that is expected to dent global crude demand and potential supply tightening due to Iran sanctions. Brent crude futures dipped 4 cents to settle at $78.05 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 8 cents to settle at $68.91 a barrel.
Crude futures retreated as EIA reported that October shale output is expected to increase to 7.59 mb/d.
The US is imposing new tariffs on $200bn worth of Chinese goods as it escalates its trade war with Beijing. The taxes will take effect from 24 September, starting at 10% and increasing to 25% from the start of next year unless the two countries agree a deal. China’s vice-premier is convening a meeting on Tuesday to discuss the government’s response to US tariffs.
Elsewhere, Russian Energy Minister Alexander Novak said that U.S. sanctions on Iran’s oil industry are unproductive and there will be consequences to such a move
Asia’s naphtha crack for first-half November at $94.70 a tonne on Monday marked the highest front-month value since Sept. 10 but the fuel is still trading at a discount against Brent due to ample supplies. Weak fundamentals had weighed heavily on spot prices last week, when sellers were offloading at discount levels to Taiwan’s Formosa, the top naphtha importer in Asia. Buyers have mostly secured cargoes for October and are starting to purchase the fuel for first-half November delivery.
The October crack is steady at $ 0.10 /bbl
Gasoline continues to stay lackadaisical in the presence of more than adequate supplies in the region. However, India’s gasoline consumption for August increased 7.8 percent from a year earlier to 2.36 million tonnes.
The October crack has improved to $ 9.20 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s cash premiums for 10ppm gasoil fell on Monday amid concerns that supply will increase in the near term due to weaker domestic sales in key markets India and China. Cash premiums for gasoil with 10ppm sulphur content slipped to 53 cents a barrel to Singapore quotes on Monday, down from 58 cents a barrel on Friday.
Meanwhile, cash discounts for jet fuel narrowed by a cent to 27 cents a barrel to Singapore quotes on Monday.
The gasoil market has been supported by weaker inventory levels of late, but a likely drop in domestic consumption in China and India may lead to higher exports out of these countries, and act as a dampener. China is drawing up a plan to replace a million heavy duty diesel trucks with ones that burn cleaner fuel.Domestic diesel sales in India dropped about 7 percent to 6.17 million tonnes in August from 6.61 million tonnes in July, oil ministry data showed on Friday. The August sales, however, were up about 4.2 percent from the same month last year.
The October crack is steady at $ 14.90 / bbl with the 10 ppm crack at $ 15.70 /bbl. The regrade is lower at $ 0.10 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
The front-month 380-cst barge crack discount to Brent crude held steady on Monday despite rising crude oil prices. The October 380-cst barge crack to Brent crude was trading at about minus $11.35 a barrel on Monday, unchanged from its settlement on Friday.
China’s fuel oil production fell 9 percent from a year ago to 1.94 million tonnes in August, data from the National Statistics Bureau showed. China’s fuel oil output for the first eight months of 2018 totalled 15.933 million tonnes, down 12 percent from the same period last year.
The October 180 cst crack is higher at -$ 4.60 / bbl with the visco spread narrowing to $ 1.00 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
Nothing fresh to report today.
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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.