Oil prices continued their collapse last week to reach their lowest level in more than a year, deepening a rapid seven-week sell-off, with surging supply and the specter of faltering demand scaring off investors. Brent crude futures lost $ 4.68 cents to settle at $58.80 a barrel. WTI crude futures fell $ 4.43 to settle at $50.42 a barrel.
These are the lowest settles for both markers for at least13 months. For the week Brent has lost 12% while WTI has lost 10.7%
The markets would be looking at OPEC action in their meeting on December 6.
Hedge funds and other money managers cut their net long positions in Brent by 32,263 contracts to 182,569 in the week ended 20th Nov according to ICE, lowest net long position since Dec 2015
In other news, the European Union leaders finally sealed a Brexit deal on Sunday, saying the package agreed with Prime Minister Theresa May was the best Britain will get in a warning to the British parliament not to reject it.
There will be no technical analysis report this week.
The naphtha crack to Brent crude slipped to a seven-session low of $20.65 a tonne on Friday, down from $25.03 a tonne in the previous session, its lowest since Nov. 14. Concerns of ample supplies continued to weigh on market sentiment despite slightly improved buying interest from North Asian buyers on Friday.
The December crack has nevertheless improved to -$ 5.40 /bbl
The Singapore 92 RON gasoline crack against Brent crude slipped to a weekly low of $0.32 a barrel, down from $0.87 a barrel on Thursday and down from a near-three week high of $1.64 on Wednesday.
Gasoline inventories held independently at ARA rose to a three-week high of 970,000 tonnes in the week to Nov. 22.
China’s gasoline exports in Oct’18 fell to their lowest in 13 months according to latest customs data.
The December crack has dropped to $ 1.85 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash discounts for 10ppm gasoil were at 37 cents a barrel to Singapore quotes on Friday, compared with a discount of 17 cents a barrel on Thursday.
Cash discounts for jet fuel narrowed to 65 cents a barrel to Singapore quotes on Friday, compared with a discount of 68 cents a barrel on Thursday.
Despite weaker crude prices, benchmark gasoil cracks have fallen about 9 percent this week, the biggest weekly percentage decline since November last year. They are however still at their strongest levels for this time of the year since 2014 and market watchers are optimistic about near-term fundamentals. Gasoil supplies are rising as some Asian refineries that shut for planned autumn turnarounds have now ramped up production, while Singapore middle distillate stocks rose to their highest in more than two months this week.
Going forward, however, declining export volumes from India and China would offer some support to the market. India’s October diesel exports were down 7.5 percent year-on-year. With at least a couple of Indian refineries undergoing maintenance during coming months, gasoil shipments out of the country would be capped, while robust domestic demand in China would keep its outflows in check.
Meanwhile, gasoil stocks in ARA dropped by more than 5 percent in the week to Thursday, making Asian traders look for opportunities to ship gasoil towards the West. The gasoil price spread between Singapore and Northwest Europe was around minus $27 per tonne on Friday,
The December crack has dropped to $ 15.15 /bbl with the 10 ppm crack at $ 16.10 /bbl. The regrade has jumped to $ 2.95 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
The front-month Singapore 180-cst fuel oil crack eased on Friday amid weaker crude oil prices, but held near a record high seen on Tuesday for the second time this month. The front-month Singapore 180-cst fuel oil swap was at $4.05 a barrel above Middle East benchmark Dubai crude oil, down from $4.39 a barrel in the previous session.
Weekly fuel oil stocks in ARA oil and storage hub jumped 14 percent, or 124 KT, to a two-week high of 1.037 million tonnes in the week ended Nov. 22.
The December 180 cst crack has improved to +$ 4.50 / bbl with the visco spread at $ 0.70 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
The regrade continues to rise and seems to be unnaturally high with Cal-19 quoting a value of $2.10 /bbl. We shall add one tranche of this today as it seems unlikely that this spread is sustainable throughout the year.
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.