Oil prices edged lower on Friday, as concerns about China’s economy outweighed bullish signals from its refining sector. Brent crude fell 49 cents to settle at $59.42 a barrel. The Dec WTI crude fell 15 cents to $53.78 / bbl.
For the week Brent fell 1.8%, while WTI lost 1.7%.
China’s economic growth slowed to 6% year-on-year in the third quarter, its weakest in 27-1/2 years and short of expectations due to soft factory production and continuing trade tensions with the United States.
Japan’s exports contracted for a 10th straight month in Sep’19, falling 5.2% YoY, raising speculation the central bank could ease monetary policy as soon as next week to counter heightening overseas risks and a slowdown in demand.
South Korean exports plunged 19.5% YoY over the first 20 days of Oct’19, led by weak sales to China and poor global sales of semiconductors, data showed on Monday, clouding the trade-reliant economy’s outlook.
China’s September refinery throughput, however, rose 9.4% year on year, a signal that petroleum demand from the world’s biggest oil importer remained robust despite economic headwinds.
U.S. and Chinese trade negotiators are working on nailing down a Phase 1 trade deal text for their presidents to sign next month, U.S. Treasury Secretary Steven Mnuchin said on Wednesday. It is largely hopes for progress toward a U.S.-China trade agreement that is supporting oil prices.
The Forties oil and gas pipeline system (FPS) in the British North Sea reopened as planned on Friday after being halted for a few hours by a power surge resulting from a lightning strike. The system transports the Forties crude oil stream that makes the biggest contribution to the Brent benchmark.
U.S. energy firms this week increased the number of oil rigs operating for a second week in a row to 713.
Money managers cut their combined futures and options position in New York and London by 11,377 contracts to 102,974 in the week to October 15, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Asia’s naphtha crack fell for a third straight session on Friday to reach a 1-1/2 week low of $82.98 a tonne as buyers’ resistance to recent high premiums could start hurting demand. There was no concrete evidence of any crackers in Asia cutting runs to combat high feedstock costs for now. Buyers are likely to rely on alternative liquefied petroleum gas (LPG) to offset some of the high costs coming from naphtha.
The November crack is higher at – $ 2.40 / bbl.
No fresh news on Gasoline markets. ARA gasoline stocks rose by 153 KT to hit a four-week high of 1.02 million tonnes in the week ended 17th October.
The November crack is lower at $ 7.65 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash premiums for 10ppm gasoil fell for a second consecutive session on Friday to $1.43 a barrel to Singapore quotes, compared with a $1.57 premium on Thursday. The cash differentials for the benchmark gasoil grade in Singapore, which have gained 19% this week, hit a near-one-year high of $1.66 a barrel on Wednesday.
Gasoil supplies are tight because of refinery maintenance in the region, while middle distillates stocks in Singapore dropped to a five-month low this week. But elevated freight rates for clean product tankers are deterring Asian gasoil cargoes from sailing westwards, even as Singapore prices for the industrial fuel are at steep discounts to European rates.
The gasoil EFS traded around minus $31 a tonne on Friday. The arbitrage is usually workable when the EFS trades at about minus $18 a tonne or below, but the recent surge in freight rates has practically shut the arb window.
Cash differentials for jet fuel were at a discount of 8 cents a barrel to Singapore quotes, compared with a 5-cent discount on Thursday.
ARA gasoil stocks rose by 82 KT to 2.81 million tonnes.
The November crack for 500 ppm Gasoil has risen to $ 17.05 /bbl with the 10 ppm crack at $ 18.05 / bbl. The regrade is at + $ 0.20 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
The front-month barge 380-cst high-sulphur fuel oil (HSFO) crack to Brent crude on Friday edged away from a record low hit in the previous session, as demand for the high-sulphur fuel started to fade ahead of the 2020 deadline.
The November 380-cst barge crack narrowed its discount to minus $27.73 a barrel, up from a fresh record low of minus $28.37 a barrel below Brent crude in the previous session.
Official storage data showed a fall in ARA Fuel Oil stocks this week by 105 KT to 966 KT, a four-week low.
The November 180 cst crack is lower at -$ 15.15 / bbl with the visco spread at $ 2.50 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh recommendations for today.
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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.