Crude Oil

Oil prices rose on Tuesday on continued optimism about the US China trade situation. Brent crude futures rose 62 cents to settle at $64.27 a barrel.. WTI rose 40 cents to settle at $58.41 a barrel.

The United States and China are close to agreement on the first phase of a trade deal, U.S. President Donald Trump said on Tuesday, after top negotiators from the two countries spoke by telephone and agreed to keep working on remaining issues.

api data

U.S. crude inventories rose by 3.6 million barrels last week to 449.6 million, as per data from the API on Tuesday. The API also reported a huge build in gasoline stocks. Distillate inventories continue to draw.

Official U.S. data is due to be released on Wednesday.


Asia’s naphtha crack rose for the sixth straight session to hover around a 6-week high of $102.65 a tonne on Tuesday due to tight supplies.

Supplies were recently affected by a string of events which included attacks on Saudi oil fields in September followed by heavy refinery maintenance and strong demand. Middle Eastern naphtha supplies to Asia in November of up to 2.2 million tonnes are sharply lower than the 2.6-2.7 million tonnes in October.

Now, bad refining margins may threaten production as refiners could cut runs to combat losses. Spot premiums of naphtha cargoes sold to South Korea, Taiwan and Japan were mostly holding at more than $20 a tonne on a cost-and-freight (C&F) basis this month versus discounts for the same month last year due to the current fundamentals. 

The December crack has improved to – $ 1.25 / bbl.


Asia’s gasoline crack, in contrast to naphtha, hit a three-week low of $8.22 a barrel due to ample stocks with record Chinese exports seen in October. 

The December crack is higher at $ 10.20 /bbl

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


Cash premiums for gasoil with 10 ppm sulphur content rose to 16 cents a barrel to Singapore quotes on Tuesday versus a 14-cent premium a day earlier.

Cash differentials for jet fuel were at a discount of 62 cents per barrel to Singapore quotes on Tuesday, compared with a discount of 61 cents a day earlier. 

The December crack for 500 ppm Gasoil is higher at $ 13.50 /bbl with the 10 ppm crack at $ 14.45 / bbl. The regrade is at   $ 0.60 /bbl 

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

Fuel Oil

Asia’s front-month 0.5% very low-sulphur fuel oil (VLSFO) time spread flipped into backwardation on signs of firming demand ahead of the 2020 deadline to switch to cleaner marine fuels. The Dec/Jan VLSFO time spread rose to a premium of $1 a tonne on Tuesday, up from a $2 a tonne discount in the previous session.

However, price fluctuations in the nascent VLSFO derivatives contracts have been volatile amid limited trade liquidity as demand for the relatively new contracts builds. 

The December 180 cst crack is higher at -$  22.95 / bbl with the visco spread at  $ 1.75 /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.

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

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