Oil prices gained were steady and buoyed by optimism that markets will proactively take measures to counter slowing growth. Brent crude futures settled 29 cents higher at $ 60.03 /bbl. WTI crude futures settled 13 cents higher at $56.34/bbl.
A rally in equity markets around the world on growing expectations that global economies will take action against slowing growth also gave oil prices a floor. China’s new lending reference rate was set slightly lower on Tuesday after the central bank announced interest rate reforms designed to reduce corporate borrowing costs, while in Germany there were also positive moves. Germany’s coalition government said it would be prepared to ditch its balanced budget rule and take on new debt to counter a possible recession.
However, U.S. crude turned lower in post-settlement trade after U.S. President Donald Trump said he was not ready to make a trade deal with China. The United States said it would extend a reprieve that permits China’s Huawei Technologies to buy components from U.S. companies, signaling a slight softening of the trade conflict between the world’s two largest economies.
The data out of API appeared mildly bullish as crude inventories fell more than expected and gasoline inventories dropped against expectations of a marginal build. Distillate inventories, however, built against expectations of a small drop.
Asia’s naphtha crack was at a two-session low of $20.38 a tonne on Tuesday, pressured by ample supplies that have battered the market repeatedly for much of this year.
Although supplies to Asia arriving from western origins, such as Europe and the Mediterranean, have been reduced, the market remains saddled with supplies because of cracker maintenance in Indonesia and Taiwan.
Total naphtha flows to Asia of up to 5.1 million tonnes this month are down from up to 5.3 million tonnes in July. Of this, less than 1 million tonnes are from the West, down 26% from July.
The September crack is lower at -6.65 / bbl.
No fresh news on the Gasoline market.
The September crack is higher at $ 5.75 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash premiums for gasoil with 10ppm sulphur content rose by 4 cents on Tuesday to 44 cents a barrel to Singapore quotes, levels not seen since early November last year.
Cash differentials for jet fuel were at a premium of 8 cents a barrel to Singapore quotes on Tuesday, compared with a 2-cent premium on Monday.
The September crack for 500 ppm Gasoil has dropped to $ 15.70 /bbl with the 10 ppm crack at $ 16.50 / bbl. The regrade is at + $ 0.45 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
The front-month 380-cst fuel oil barge crack discount to Brent crude widened on Tuesday, but firm buying interest helped lift Asian fuel cash premiums.
Falling fuel oil crack values this month reflected market expectations of shrinking HSFO demand ahead of the International Maritime Organisation (IMO) rules that limited the sulphur content of marine fuels to 0.5%, starting 2020.
The Sept. 380-cst barge crack was at minus $16.70 a barrel against Brent around the end of Asian trading hours on Tuesday, a drop from minus $15.94 a barrel in the previous session. By comparison, the front-month barge crack was at minus $12.15 a barrel at the start of the month; it hit a more than three-year low of minus $17.95 a barrel on Aug. 14.
In the physical market, however, 380-cst HSFO cash premiums climbed to a more than two-week high on firm buying interest in the Singapore window for prompt fuel cargoes. While the availability of prompt 380-cst supplies has improved in recent weeks compared with July, cash premiums continue to be supported by relatively tight supplies of the fuel.
The September 180 cst crack is lower at – 9.40 / bbl with the visco spread at $ 2.15 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh recommendations for 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.