Crude Oil
Oil prices fell more than 1% on Monday, erasing much of last week’s gains and tumbling alongside U.S. stocks on uncertainty over a trade deal between the United States and China. Brent crude futures settled at $62.44 a barrel, down 86 cents. WTI crude fell 67 cents to settle at $57.05 a barrel.
Wall Street’s three main stock indexes also fell from last week’s record highs following a report that stoked concerns a U.S.-China trade deal might not get through, which pushed oil prices lower.
On Monday, CNBC quoted a Chinese government source saying the mood in Beijing about a trade deal was pessimistic due to U.S. President Donald Trump’s reluctance to roll back on tariffs.
Naphtha
No fresh news on the naphtha markets.
The December crack is higher at – $ 2.90 / bbl.
Gasoline
Asia’s gasoline crack fell to an almost two-week low of $8.65 a barrel on Monday as high crude oil prices weighed.
Nine gasoline cargoes changed hands, the highest volume in a single session since Oct. 9. Singapore trader Hin Leong snapped up eight of the nine cargoes, bringing its total purchases since Nov. 1 to about 2.2 million barrels out of the 2.7 million barrels sold.
Hin Leong is likely to be supplying the cargoes to Indonesia – Asia’s top gasoline importer – and Myanmar. Pertamina’s import demand for November is seen firm, averaging around 10 million barrels. It has outstanding tenders to buy gasoline for first-half 2020 arrival at Merak/Balongan/Tuban and for Dec. 1-3 arrival at Balonga.
The December crack is higher at $ 7.30 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10 ppm sulphur content climbed to 34 cents per barrel to Singapore quotes, compared with 31 cents per barrel on Friday.
Slowing economic activity in major regional markets including India and China is taking a toll on their respective domestic gasoil consumption, and that in turn is leading to a plenty of supplies available in the region.
Cash differentials for jet fuel remained unchanged at a discount of 60 cents per barrel to Singapore quotes on Monday, with no bids or deals in the physical trade window.
The December crack for 500 ppm Gasoil has crashed to at $ 13.60 /bbl with the 10 ppm crack at $ 14.60 / bbl. The regrade is at $ 0.80 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s HiLo spread, or the price differential between Singapore 380-cst high-sulphur fuel oil (HSFO) and 0.5% low-sulphur fuel oil (VLSFO), on Monday slipped away from a record high hit in the previous session.
The HiLo spread for December was at $271 a tonne on Monday, down from a record high of $274.50 a tonne on Friday. The spread between VLSFO and HSFO has more than quintupled since January, which is a clear indication that the upcoming IMO regulations from Jan. 1, 2020 are already impacting refinery cracks.
The December 180 cst crack is at -$ 22.90 / bbl with the visco spread at $ 2.15 /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.