Crude Oil
Oil prices rose 1 percent on Thursday following the U.S. stock market higher. Brent crude futures rose 72 cents to settle at $76.89 a barrel. U.S. crude settled 51 cents higher at $67.33 a barrel.
Also lifting prices were comments by Saudi Arabia Energy Minister Khalid Al-Falih, who said there could be a need for intervention to reduce oil stockpiles after increases in recent months. Saudi Arabia’s OPEC governor said on Thursday the oil market could face oversupply in the fourth quarter.
Naphtha
Asia’s naphtha remained weak with cargoes being sold at discounts and the intermonth spread persisting in a contango structure since Oct. 17 due to excess supplies.
The November crack is not at a record low of – $ 4.10 / bbl
Gasoline
Asia’s gasoline crack fell to $3 a barrel, 11.5 percent above Tuesday’s 26-month low of $2.69.
Supplies remained heavy with Singapore’s onshore light distillates stocks hitting a five-week high of 12.1 million barrels in the week to Oct. 24.
The November crack has dropped to $ 3.50 /bbl.
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10ppm sulphur content were at $1.70 a barrel to Singapore quotes, down from $1.86 a day earlier.
Firmer buying interest in the face of limited supply is keeping the gasoil market well supported, while a push to switch to cleaner marine fuels has revved up dependence on the fuel.
Jet fuel cash premiums fell to 13 cents a barrel to Singapore quotes on Thursday, compared with a premium of 21 cents on Wednesday.
Middle distillate stocks in Singapore fell by 533 KB to a 4 1/2 month low of 8.66 million barrels
The November crack has improved to $ 17.10 /bbl with the 10 ppm crack at $ 17.95 /bbl. The regrade is lower at $ 0.35 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Cash premiums for cargoes of Asia’s mainstay 380-cst high-sulphur fuel oil hit a more than three-month high on Thursday, lifted by tight near-term supplies for finished grades of the fuel coupled with steady demand.
Premiums for 380-cst cargoes climbed to $7.63 a tonne to Singapore quotes on Thursday, up from $6.99 in the previous session and their highest since July 20.
Meanwhile, Singapore fuel oil inventories hit a two-week high in the week to Oct. 24, in line with higher weekly net fuel imports. Onshore fuel oil inventories climbed 651 KB to 18.36 million barrels. Singapore fuel oil imports from the UAE were at their highest since the week ending Sept. 14, 2016, when they totalled 301 KT. Meanwhile, fuel oil imports from Iraq in the week to Oct. 24 were absent for the first time in 11 weeks.
The United States will seek to develop a proposal or proposals with like-minded countries for a May 2019 meeting of the International Maritime Organization’s (IMO) environmental body, Rear Admiral John Nadeau, assistant commandant for prevention policy for the Coast Guard, said on the sidelines of a conference in New York. Some shipping associations together with the Bahamas, Liberia, Panama and the Marshall Islands this week proposed an “experience-building phase,” which gained support from Washington. But Wednesday’s meeting of IMO’s Marine Environment Protection Committee (MEPC) in London pushed back on the idea, calling it vague, confusing and said it would require more definition. The proposal’s backers were told they could submit further concrete proposals for the next MEPC in May. That will leave little time for deliberations before the regulations kick in.
The November 180 cst crack is stronger at +$ 1.30 / bbl with the visco spread at $ 0.95 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
While the middle distillates cracks are easing, fuel oil cracks seem to be getting stronger and stronger. We will add one more trance of Fuel Oil cracks in 1Q19 at current values of -$0.95 /bbl.
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.