With the US closed for the Thanksgiving holiday yesterday there was very little activity in the markets yesterday
All eyes are on OPEC as we head towards the end of November as there appears to be no bottom currently should there be no attempt to limit supply. As of now all efforts are on to rope in all participants into this activity.
The general expectation is that OPEC should cut output along with its partners to limit supply to 33 MB / day. i.e. a cut of close to 800 Kb/d. Anything less than that would not make a meaningful impact on the supply overhang. A larger cut, say 1 MB/ d would send prices climbing into the $ 50-55 range. However, too large a cut would not send the prices soaring because there is a limit to demand. Furthermore, this sort of cut would make the markets doubt the implementability of such cuts.
The Naphtha fundamentals continued to ease as either buyer requirments appear to have been fulfilled or they are seeing too many sellers in the market. Premiums for cargos appear to have slipped by about $3-4 per tonne.
The December crack is showing a value of just under $ 1 /bbl
The Gasoline crack for December continues to remain strong at $11.40 / bbl for December.
This is inspite of stocks rising to 11.7 million barrels, the highest level in the past month. This is however, 10% lower than last years level of 13.2 million barrels.
A fire was reported at the Reliance refinery in Jamnagar. While the unit was under maintenance, the impact of this fire on the restart of the FCCU there is not known.
Middle Distillate prices were steady even as inventories increased to 13.4 million barrels. Unworkable arbitrage economics appear to be driving barrels from the Arab Gulf to the East rather than the west which is their normal destination. Chinese exports were reported to be almost 50% higher than the previous year
The gasoil crack for December was reported as around $ 11.50 /bbl with the regrade valued at around $ 1.60/bbl.
The fuel oil crack eased a bit today notwithstanding a small drop in stocks. Traders were reporting a marked drop in demand.
The 180 cst fuel oil crack for December showed a value of -$ 1.4/bbl, a drop of 40 cents. The value for the January crack was less affected at – $ 2.15 / bbl .
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.