Crude Oil
Crude prices edged higher as supply concerns post November continued to bother the market. Brent crude November future contract rose 38 cents to settle at $ 81.72 a barrel. The more active December contract settled 59 cents higher at $81.38 a barrel. WTI crude futures rose 55 cents to settle at $72.12 a barrel.
In other news, unofficial sources said that Saudi Aramco will bring new crude output capacity of some 550,000 barrels per day (bpd) online in the fourth quarter from two fields – Khurais and Manifa – giving it the ability to boost production if there is demand. The Khurais field has light sour crude with a pumping capacity of 250-300 kb/d. The Manifa field has heavy sour crude with a pumping capacity of 300 kb/d.
Naphtha
Front-month Asia naphtha crack for first-half November rose for the second day to reach a 3-1/2 week high of $101.20 a tonne on Thursday, on expectations that demand would rise. Buyers were expected to start purchasing second-half November cargoes now that an annual oil conference in Singapore has ended. Due to the conference, participants were mostly away from the market for the first three days of the week.
The October crack is higher at -$ 0.50 /bbl
Gasoline
Asia’s gasoline crack recovered to a three-session high of $7.51 a barrel, snapping four straight sessions of losses.
Demand has led to Singapore light distillates stocks falling nearly 5 percent or 590,000 barrels to reach a two-week low of 11.84 million barrels in the week to Sept. 26.
The October crack is higher at $ 9.80 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash differentials for gasoil with 10ppm sulphur content rose to 75 cents a barrel to Singapore quotes, from 71 cents a barrel on Wednesday.
Meanwhile, cash discounts for jet fuel widened to 41 cents a barrel to Singapore quotes, compared with a discount of 35 cents on Wednesday.
Singapore onshore middle distillate stocks rose 6.2 percent in the week to Sept. 26 to 10.1 million barrels. Since the start of the year, Singapore middle distillate inventories have averaged 9.3 million barrels a week, compared with a weekly average of about 12 million barrels in 2017. Overall, onshore middle distillate inventories were 3.5 percent lower than a year ago.
The October crack is nevertheless higher at $ 15.90 / bbl with the 10 ppm crack at $ 16.70 /bbl. The regrade has dropped to -$ 0.70 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
The 380-cst fuel oil crack discount to Brent crude held steady at about -$ 11.20 /bbl on Thursday despite sharp gains in crude oil prices this week on the back of tight near-term supply outlook.
Singapore fuel oil inventories surged 2.328 million barrels to 17.616 million barrels in the week to Sept. 26. Exports from Singapore were at their lowest since June 2011. This week’s onshore fuel oil inventories were 24 percent lower than a year ago.
The October 180 cst crack is higher at -$ 3.65 / bbl with the visco spread at $ 1.20 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
The October regrade value has dropped to -$0.70. We would recommend adding one more tranche of this spread for jet consumers to allow to settle.
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.