Crude Oil
Oil prices appear to be running out of steam. While there is always the fear that OPEC may adhere to its production cuts, there is tremendous scepticism about its ability to do so. And when you hear the first notes of discord from Iran (who else?) saying it doesn’t wan’t to cut, it is natural to want to first book profit on a 13-16% rise in profits.
We saw some of this in the price action today with the impending return of the Buzzard field adding to the overhang.
Nevertheless, the fear of the OPEC action remains along with expected API data today. An unexpected draw could once again send oil higher.
Brent ended the day at $ 51.46 / bbl while WTI settled at $ 50.52 after briefly trading below $ 50 / bbl.
Naphtha
Strong buying was seen in Naphtha with rumors of deals being struck at small premiums to the benchmark (as compared to a discount a week ago).
ADNOC has offered naphtha for 2017 at prices of $2 – $3 per ton lower than its prices for the previous year.
The Singapore Naphtha crack may just be hovering at a small premium above Dubai today, a level not seen since the beginning of the year.
Gasoline
The gasoline crack continues to firm up as Saudi Aramco’s Ras Tanura refinery heads into maintenance in November and December. Further Cosmo Oil is expected to shut down one CDU at its Yokkaichu refinery permanently in response to a government directive.
On the bearish side, China exported close to 842,000 tonnes in the month of September, way above the average of around 762,000 tonnes per month for this year.
The crack is unchanged at close to $11.5 per bbl
Middle Distillates
Gasoil continues to remain strong even as refineries are expected to return from maintenance soon. This is largely in anticipation of a cold winter in Europe and the US. The November gasoil crack is showing a value of over $13 / bbl, a level not seen in many moons.
Jet is still weak quoting at a discount to gasoil for November and very small premiums for December.
Fuel Oil
Fuel Oil continues its incredible strength with the 180 cst November crack showing a value of less than $ 3 /bbl discount to Dubai. It has settled stronger than this only once in the last 10 years in November.
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.