Crude Oil

Oil prices dipped on Tuesday after being positive for most of the day. Brent crude  futures fell 27 cents to settle at $60.21 a barrel. WTI crude  fell by 7 cants to close at $51.56 a barrel.

Prices were weighed down by uncertainty over the U.S.-China trade war and signs of increased global crude production, but losses were limited by expectations that crude exporters would agree to cut output at an upcoming OPEC meeting.

Market participants looked ahead to a meeting of leaders of the Group of 20 nations (G20), the world’s biggest economies, on Nov. 30 and Dec. 1, with the trade war between Washington and Beijing top of the agenda. The top three crude producers, Russia, the United States and Saudi Arabia, will be at the G20 Summit, raising expectations that oil policy will be discussed.

The shutdown of Britain’s largest oilfield for repairs is reducing supply of a North Sea crude that helps to set global prices, as trade sources said on Tuesday three cargoes due to load in December had been cancelled.

Japanese buyers are unlikely to load Iranian oil after April 1 without an extension of the country’s current waiver because of the difficulty in making payments before sanctions are reimposed in early May, the Petroleum Association of Japan (PAJ) said on Tuesday.

API Data 

The API reported a build of 3.45 million barrels of crude. If the official figures confirm this build, it will be the tenth consecutive weekly rise in crude stocks. Gasoline stocks drew giving some relief to the bearish picture as distillate stocks had also shown a build.


Asia’s naphtha crack climbed for a second straight session on Tuesday, rising to a five-session high of $29.28 a tonne, but concerns of ample supplies continued to weigh on market sentiment.

The December crack is nevertheless lower at -$ 5.25 /bbl


Similarly, while falling crude oil prices helped lift Asia’s gasoline crack back into positive territory against Brent crude on Tuesday, concerns of a persistent supply glut meant upside potential over the near term would be limited. The Singapore 92 RON gasoline crack against Brent crude climbed to $0.05 a barrel, up from a discount of $0.10 a barrel on Monday.

The December crack has tumbled to $ 0.80 /bbl

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


Cash discounts for 10ppm gasoil  narrowed to 37 cents a barrel to Singapore quotes on Tuesday from a discount of 38 cents a barrel on Monday. 

Cash differentials for jet fuel  widened their discounts to 68 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 66 cents a barrel on Monday.

The differentials for jet fuel dipped on Tuesday on concerns that seasonal heating demand for the distillate fuel might be subdued this year due to forecasts for warmer winter temperatures. 

The December crack has dropped to $ 14.25 /bbl with the 10 ppm crack at $ 15.00 /bbl. The regrade is at $ 2.80 /bbl

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

Fuel Oil

The front-month 380-cst barge fuel oil crack on Tuesday slightly narrowed its discount to Brent crude as crude oil prices slipped. The December 380-cst barge fuel oil crack to Brent crude was trading at about minus $3.85 a barrel on Tuesday, compared with a discount of $4.15 a barrel in the previous session.

Reflecting expectations of a tighter supply outlook in December, the 380-cst front-month time spread was also slightly higher on Tuesday at about $11.60 a tonne on Tuesday, from $11.25 a tonne on Monday.

The December 180 cst crack has however crashed to +$ 3.60 / bbl with the visco spread at $ 0.65 /bbl

Click Here for a graphical depiction of Fuel Oil stocks by region.

Hedge Recommendations

Jet has also started easing out as a result of which the regrade is returning to lower levels. Also, the entire fuel oil curve seems to have dropped which could possibly signal the end of the buying frenzy in the market.

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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