Crude Oil
Oil prices edged higher on Monday as positive comments from the United States and China rekindled hopes in global markets that their trade war would end soon. Brent crude futures rose 26 cents to settle at $63.65 a barrel.. WTI rose 24 cents to settle at $58.01 a barrel.
Prices were also supported by strong equity markets as the S&P 500 and the Nasdaq indexes climbed to new record highs on Monday.
U.S. national security adviser Robert O’Brien on Saturday said that an initial trade agreement with China was still possible by the end of the year.
China and the United States are “moving closer to agreeing” on a “phase one” trade deal, according to the Global Times, but the report noted that Washington and Beijing had not agreed on specifics or size of rollbacks of tariffs on Chinese goods.
Unrest in Iran and Iraq have also supported oil prices. Security forces opened fire on protesters in Baghdad and several cities in southern Iraq on Sunday, killing at least nine people and wounding dozens of others. Thousands of supporters of Iran’s clerical establishment rallied in Tehran on Monday, accusing the United States and Israel of instigating the most violent anti-government protests for over a decade in the Islamic Republic.
China’s crude imports from Saudi Arabia surged 76% year on year to hit new high of 1.99 MB/D in Oct’19, while there were no arrivals from Venezuela for the first time since Oct’10, according to the latest data from the General Administration of Customs showed Monday
Naphtha
Asia’s naphtha crack rose for the fifth straight session on Monday to reach an almost six-week high of $95.73 a tonne supported by tighter supplies.
A total of up to 5.5 million tonnes of naphtha is expected to flow to Asia from regions, including the Middle East and the West such as Europe, this month. This is down by about 100 KT from October, as a sharp drop in Middle Eastern supplies were offset by high volumes of Western cargoes arriving this month.
The December crack has improved to – $ 1.70 / bbl.
Gasoline
Asia’s gasoline crack fell to a near 3-week low of $8.48 a barrel on ample Chinese fuel.
The December crack is higher at $ 9.10 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10 ppm sulphur content dropped to 14 cents a barrel to Singapore quotes on Monday, a level not seen since Sept. 19. They were at a premium of 19 cents a barrel on Friday.
The December/January time spread for 10 ppm gasoil , which has narrowed about 85% in the last month, traded at a premium of 14 cents a barrel on Monday. The front-month time spread was at 15 cents per barrel on Friday.
Gasoil margins have dropped 23% in the last month, hurt by abundant supplies and lacklustre demand.
Cash differentials for jet fuel were at a discount of 61 cents per barrel to Singapore quotes on Monday, compared with a 58-cent discount in the previous session on Friday.
The December crack for 500 ppm Gasoil is higher at $ 13.45 /bbl with the 10 ppm crack at $ 14.40 / bbl. The regrade is at $ 0.65 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s front-month very low-sulphur fuel oil crack widened its premium to Brent crude on Monday, climbing to a November high as demand for the residual fuel continues to build ahead of the 2020 switch to cleaner marine fuels.
The December VLSFO crack was at $17.49 a barrel above Brent crude on Monday, up from $16.46 a barrel on Friday and its highest since Nov. 1.
By contrast, fading demand for HSFO helped push the front-month 380-cst HSFO barge crack to Brent to a fresh record low of $32.33 a barrel on Monday, surpassing the previous low of $31.99 a barrel on Nov. 14.
The December 180 cst crack is lower at -$ 23.30 / bbl with the visco spread at $ 1.50 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action 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.