Crude Oil
Oil was largely flat on Thursday as bullish and bearish concerns tugged at investors. Brent futures rose 35 cents to settle at $62.74 a barrel, while WTI crude eased 8 cents to settle at $56.41/bbl.
A Pentagon statement intensified concerns of a Middle East conflict disrupting supply, supporting prices. Crude futures pared losses late in the session after the U.S. Department of Defense said it would deploy radar systems, Patriot missiles and about two hundred personnel to bolster Saudi Arabia’s defenses after an attack on the kingdom’s oil facilities this month. Details about the deployment clarify the Pentagon’s Friday announcement about U.S. plans to send more forces to Saudi Arabia after the Sept. 14 strike, which Washington has blamed on Iran.
On the other hand, new details connected to the impeachment inquiry into U.S. President Donald Trump weakened demand sentiment. Oil took a hit earlier in the session after the U.S. House Intelligence Committee released a declassified version of a whistleblower report alleging Trump used his office to solicit interference in the 2020 presidential election from a foreign country.
Naphtha
Asia’s naphtha intermonth timespread and spot premiums were at their highest in over a year, as attacks on Saudi Arabia’s oil facilities on Sept. 14 raised supply worries. Naphtha price for front-month first-half November was $13.50 higher than the following month, making this the widest intermonth gap since Jun. 4, 2018.
Several buyers emerged this week and premiums were mostly at their highest levels since 2018. Taiwan’s Formosa, for instance, bought around 100 KT of open-specification naphtha for first-half November arrival at Mailiao at premiums of about $12 a tonne to its own price formula on a C&F basis, the highest it has paid since May 2018. It had on Sept. 12 paid a discount of $2 for cargoes scheduled for second-half October arrival.
The October crack is higher at – $ 5.15 / bbl.
Gasoline
No fresh news on the gasoline markets. Gasoline stocks in Singapore rose by 72 KB to 10.07 million barrels.
The October crack is lower at $ 6.85 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10ppm gasoil were at 32 cents a barrel to Singapore quotes, up from 28 cents per barrel on Wednesday.
Cash premiums for jet fuel were at a premium of 22 cents a barrel to Singapore quotes, as against a premium of 18 cents a barrel in the previous session.
Middle Distillate stocks in Singapore rose by 1.2 million barrels to 13.67 million barrels. Over the last two weeks stocks have burgeoned from below the 5 year average to a seasonal high for the time of the year. It could be that stocks are being built up for demand for IMO 2020.
The October crack for 500 ppm Gasoil is lower at $ 17.30 /bbl with the 10 ppm crack at $ 18.00 / bbl. The regrade is at + $ 0.35 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s high-sulphur fuel oil (HSFO) firmed on Thursday amid expectations that supplies will remain tight in the near term despite an anticipated gradual fall in demand as shippers switch to lower sulphur fuels from 2020. 380-cst cash premiums, near dated time spreads and cracks were all higher on Thursday despite limited trade activity.
Fuel Oil stocks in Singapore rose by 1.85 Million barrels to 20.37 million barrels
The October 180 cst crack is steady at -$ 2.90 / bbl with the visco spread at $ 1.30 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action for 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.