Crude Oil

Oil prices rose nearly 3 percent on Monday, clawing back some of last week’s steep losses, but gains were capped by uncertainty over global economic growth and further signs of increasing supply, including record Saudi production. Brent crude  futures rose $1.68 to settle at $60.48 a barrel. WTI crude  gained $1.21 to close at $51.63 a barrel.

Supporting oil prices, U.S. stock markets broadly rallied as Cyber Monday, the largest online shopping day of the year, began.

However, demand concerns and record output from Saudi Arabia limited Monday’s rebound. Saudi crude oil production hit 11.1-11.3 million barrels per day (bpd) in November, an all-time high.

Hedge funds and other money managers raised their bullish position on U.S. crude for the first time in 8 weeks in the week that ended Nov. 20. The increase was the first since September and lifted net longs from their lowest point in more than a year. 

U.S. President Donald Trump said on Monday he expected to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from the current 10 percent and repeated his threat to slap tariffs on all remaining imports from China. 

Mexican national oil company Pemex’s crude output dipped to 1.76 million barrels per day (bpd) in October, down more than 7 percent compared with the same month last year, according to company data released on Monday


No fresh news from the Naphta market for today.

The December crack is higher at -$ 5.10 /bbl


Despite sharply lower crude oil prices last week, Asia’s gasoline crack flipped back to negative territory against Brent crude as concerns over ample near-term supplies continued to weigh on market sentiment. The Singapore 92 RON gasoline crack against Brent crude slipped to a near two-week low of minus $0.10 a barrel, down from a premium of $0.32 a barrel on Friday.

Reflecting the weaker demand fundamentals, the Singapore 92 RON gasoline Dec/Jan time spread widened its contango structure to minus 43 cents a barrel, from minus 34 cents a barrel on Friday.

The December crack is steady at $ 1.85 /bbl

Click Here for a graphical depiction of Global Gasoline stocks by region.


Cash discounts for 10ppm gasoil  were at 38 cents a barrel to Singapore quotes on Monday, compared with a discount of 37 cents a barrel on Friday. 

Cash discounts for jet fuel  widened by a cent to 66 cents a barrel to Singapore quotes on Monday, as the prompt-month time spread widened its contango.

The gasoil price spread between Singapore and Northwest Europe  widened slightly to around minus $28 per tonne on Monday. The open arbitrage opportunity is what is supporting Middle distillate cracks even as cash trades happen at discounts and time spreads are in contango.

The December crack has dropped to $ 14.65 /bbl with the 10 ppm crack at $ 15.40 /bbl. The regrade is at $ 2.90 /bbl

Click Here for a graphical depiction of Global Distillate stocks by region.

Fuel Oil

Buoyed by a sharp drop in crude oil prices on Friday and ongoing signs of tightening supplies, the front-month Singapore 180-cst fuel oil refining margin firmed on Monday, returning to a record high it reached last week.

The front-month Singapore 180-cst fuel oil swap was at a premium of $4.47 a barrel above Middle East benchmark Dubai crude oil on Monday, up from $4.05 a barrel on Friday.

Russia’s fuel oil exports fell to their lowest in more than a decade in October, according to data provided last week by the Energy Ministry. Russia’s fuel oil exports sank to 2.23 million tonnes in October, down 14 percent from September and 24 percent lower from the same time last year. Russian fuel oil exports were last lower in April 2008 at 1.116 million tonnes. This came as Russian fuel oil output fell to 3.735 million tonnes in October, down 5 percent from September and 5.5 percent lower from the year-ago levels.

The December 180 cst crack is steady at +$ 4.50 / bbl with the visco spread at $ 0.70 /bbl

Click Here for a graphical depiction of Fuel Oil stocks by region.

Hedge Recommendations

The regrade is strengthening as gasoil drops, but jet holds steady. Even should our hedges run into losses, the levels at which the hedges have been laid are good and have protected our margins.

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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

Leave a Comment