Crude Oil
WTI retraced most of Friday’s gains yesterday as the uncertainty about the Keystone pipeline looked like coming to an end. Brent, however, stayed firm, losing just two cents to close at $63.84 /bbl. WTI gave up 84 cents to settle at $58.11 /bbl.
TransCanada Corp said it would restart the pipeline on Tuesday under reduced pressure after obtaining approval from the US authorities.
The WTI front month time spread, which had flipped into backwardation following the shut down, returned to contango yesterday. Our recommendation to trade the WTI-Brent spread would have reaped good dividends for a one day operation!
The overall outlook for the market remains bullish though with the OPEC meeting round the corner. Having said that, money managers reduced their positions in both Brent and WTI futures.
Uncertainty over Russia’s determination to join with other major oil producers in extending crude production curbs beyond next March has weighed on oil markets. Russia’s economy was negatively affected in October by the ongoing curbs, which saw Moscow agree to cut output by 300,000 bpd, Economy Minister Maxim Oreshkin said on Nov. 23.
Goldman Sachs said the outcome of the meeting was “much more uncertain than usual”, adding that the market faced downside risks. view risks to oil prices as skewed to downside this week as we believe current prices, time spreads and positioning already reflect a high probability of a nine-month extension.”
Naphtha
Asia’s naphtha crack eased on Monday to $126.98 /MT. However, if we look at it from a crack perspective, the drop is just about 10 cents per barrel which is within the norms of normal fluctuation.
The December crack continues to climb and is valued at $ 4.70 /bbl.
Gasoline
The physical Asian gasoline crack eased to $ 9.83 / bbl. Data from Genscape showed that 3.6 million tonnes of gasoline and reformate was being moved from Europe to China.
The December 92 Ron paper crack has however strengthened further to $ 12.40 /bbl.
Distillates
Distillate supply and demand was fairly balanced preventing much impact on cash premiums. Jordan Petroleum company purchased over 4 million barrels of gasoil and gasoline for delivery in the first half of 2018. India’s diesel demand has recovered slightly post monsoon though it is nowhere near its peak (which is what is prompting exports from the Indian public sector units).
The December 0.05% Gasoil crack is slightly lower at $13.35 /bbl. The regrade has fallen to $ 1.00 /bbl.
Fuel Oil
The 180 cSt Fuel Oil crack settled marginally higher yesterday, snapping 5 sessions of losses. The crack versus Brent settled at -$ 5.12 / bbl, 14 cents higher than previously.
The December 180 cst crack is at -$ 2.70 /bbl. The visco spread is valued at $ 0.65 /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