Crude Oil
Oil prices rose in volatile trade on Tuesday supported by expectations of a drawdown in U.S. crude inventories. Brent crude futures settled 81 cents higher at $ 59.51 /bbl. WTI crude futures settled $ 1.29 higher at $54.93 /bbl.
Prices extended gains in post-settlement trade, with Brent touching a high of $59.88 and WTI hitting $55.45, after data from the API showed U.S. crude inventories fell more than expected.
During the session, the oil market had oscillated in response to swings on Wall Street, which was hurt by a fall in financial stocks, while revived worries about a U.S. recession overshadowed early optimism of a resolution to the prolonged trade dispute between the world’s two largest economies.
U.S. President Donald Trump said on Monday that he believed China was sincere about wanting to reach a deal, while Chinese Vice Premier Liu He said China was willing to resolve the dispute through “calm” negotiations. On Tuesday, however, concerns about trade resurfaced after China’s foreign ministry that it had not heard of any recent telephone call between the United States and China on trade, and said it hopes Washington can stop its wrong actions and create conditions for talks.
Iran would need three days to lift its oil production back to the level it was at before US sanctions were imposed, the semi-official Mehr news agency quoted the Iranian Oil Minister as saying on Tuesday.
In other news, WTI Midland crude prices at Plains All American Pipeline LP’s Midland terminal spiked this month compared with barrels traded at Enterprise Products Partners LP’s Midland terminal as Plains’ Cactus II pipeline began service, oil traders familiar with the matter said
api data
U.S. crude stockpiles fell sharply last week as imports dropped, plummeting 11.1 million barrels, compared with expectations for a 2-million barrel draw. Gasoline and Distillate stocks also drew, the latter significantly so. The draw in inventories amid strong refining runs is lending strength to crude prices, overriding concerns that trade tensions could weigh on demand.
Naphtha
Asia’s naphtha crack hit a 10-week low of $12.18 a tonne on Tuesday on mostly muted spot demand and ample supplies.
Based on data from IHS Markit, Asia will continue to grapple with oversupply next month although the excess volume will be lower than this month. The consultancy firm expects the September supply surplus to be 100 KT versus 150 KT to 200 KT in August.
The September crack is lower at -7.20 / bbl.
Gasoline
No fresh news on the gasoline markets.
The September crack is steady at $ 6.05 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for gasoil with 10ppm sulphur content fell to 22 cents a barrel to Singapore quotes on Tuesday, compared with a premium of 32 cents per barrel a day earlier.
The front-month time spread for the benchmark gasoil grade in Singapore , however, widened its backwardated structure on Tuesday to trade at 20 cents per barrel, compared with 13 cents on Monday.
Cash premiums for jet fuel were at 8 cents a barrel to Singapore quotes on Tuesday, down from a 10-cent premium on Monday.
Ongoing trade tensions and global economic weakness took a toll on the Asian air freight market in July, according to data from the AAPA. Air cargo demand in terms of freight ton kilometers fell 7.7% year on year in July, while supply edged up 0.4% over the same period.
The September crack for 500 ppm Gasoil has eased to $ 15.05 /bbl with the 10 ppm crack at $ 15.90 / bbl. The regrade is at + $ 0.50 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The cash premium for cargoes of 380 cst fuel oil in Singapore rose to a record on Tuesday, according to Reuters data, boosted by intense buying interest amid shrinking supplies. The cash premium for 380 cst HSFO jumped to $30.88 per tonne to Singapore quotes on Tuesday, up from $23.09 a tonne in the previous session.
The latest record exceeds a previous high of $24.31 per tonne on July 11.
The September 180 cst crack is higher at – 3.10 / bbl with the visco spread at $ 1.50 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh recommendations 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.
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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.