Crude Oil
Crude prices retreated from multi month highs as market took profits on the steep climb. Brent fell by $ 0.58 to settle at $ 58.44/bbl, while WTI lost $ 0.34 to settle at $ 51.88/bbl.
The profit taking appears to be natural. This was in expectation of a build in the API. However the API report managed to surprise everybody.
API Report
The API reported a draw of 761 KB of crude stocks. This caught the market by surprise as it was expecting a build of 2.3 million barrels. Another surprise was the build in gasoline 1.5 million barrels versus an expectation of a draw of 962 KB. Distillates, however, drew more than expected at 4.5 million barrels as against an expectation of a draw of 2.5 million barrels.
Markets, as usual will look to the DOE data coming today for corroboration.
Naphtha
The physical Naphtha window was uncharacteristically quiet, a phenomenon attribute to the APPEC conference being held in Singapore currently. The October crack is valued marginally lower at $ 2.90 /bbl
Gasoline
The physical gasoline crack settled lower yesterday at $10.66 /bbl. Paper markets have followed this with the October 92 Ron crack being valued today at $ 11.75 /bbl.
Distillates
Diesel cash premiums increased as traders expected demand to pick up in the fourth quarter. Demand growth for diesel this year makes up around 50% of the total demand growth for products this year as compared to 27% last year. While a cold winter could boost demand further, we are arguably seeing a lot of hedging action which is pulling the paper crack down.
The October crack is lower at $13.55 /bbl. The regrade too is higher at$ 0.55 /bbl
Fuel Oil
High crude prices, coupled with slacking off of demand appear to have driven the 180 cst October crack to multi month lows. October is valued at -$3.20 / bbl. Fuel Oil last settled below -$ 3.00 /bbl in April 2017. The visco spread is unchanged at $ 0.80 /bbl.
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