Oil prices fell on Tuesday as some investors took profits on recent strong gains, but losses were limited the day after a U.S.-Mexico trade agreement eased worries about tensions between the two countries. Brent crude futures fell 26 cents to settle at $75.95 a barrel. The global benchmark touched $76.97 early in the session, the highest since July 11. WTIcrude futures fell 34 cents to settle at $68.53 a barrel.
News that workers at Total’s North Sea oil platforms no longer plan to strike on Sept. 3 also weighed on the market.
Canada’s top trade negotiator joins her Mexican and U.S. counterparts in Washington on Tuesday in a bid to remain part of the trilateral pact.
China’s independent refiners have ramped up their foreign oil buying after returning from prolonged summer maintenance to gear up for rising winter fuel demand. The independents imported 6 million tonnes, or 1.4 mb/d of crude in August, up 40 percent from July and 10 percent higher from the same period last year.
Meanwhile, Iran’s crude oil and condensate exports in August are set to drop below 70 million barrels for the first time since April 2017. Iranian exports are expected to drop to 1.5 mb/d in September, from 2.3 mb/d in June, according to officials of the state-owned company who spoke to the Wall Street Journal.
The API reported surprisingly flat numbers to a market expecting a reasonable draw in crude and a build in products. Crude stocks built by a 38 KB while gasoline stocks built by 21 KB. Distillate stocks too built by 982 KB, much less than expected. Crude stocks in Cushing were reported to have increased by 130 KB.
Naphtha spot prices in South Korea sank on Tuesday as high supplies persisted while demand slowed because of cracker maintenance from now until fourth quarter in North Asia. The weak fundamentals were reflected in spot deals. YNCC, for instance, paid a discount of about $2 a tonne to Japan quotes cost and freight (C&F) for open-specification grade scheduled for delivery to Yeosu in the first half of October, making this the first discount it has paid since February. Hanwha Total also bought for delivery in the first half of October at what were premiums lower than the $3 a tonne it paid a week ago..
The September crack has improved to -$ 0.70 /bbl
Asia’s gasoline crack was at a three-week low of $7.97 a barrel. While stocks have been steadily decreasing both in US and in Asia, the market is still fairly confident of adequate supplies.
The September crack is higher at $ 9.10 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Asia’s 10 ppm gasoil stayed firm at above $16 a barrel on Tuesday, supported by strong crude oil prices and solid demand. But middle distillate inventories in the United States, which include heating oil and diesel fuel, were seen up 1.4 million barrels last week. There were no gasoil deals but one on jet fuel in Singapore..
The September crack is higher at $ 15.85 / bbl with the 10 ppm crack at $ 16.65 /bbl. The regrade is higher at – $ 0.25 /bbl.
Click Here for a graphical depiction of Global Distillate stocks by region.
Expectations of higher supply in the Singapore fuel oil hub continued to weigh on market sentiment, pulling the 380-cst front-month time spread and cash premium lower for a straight second session on Tuesday.
The front-month 380-cst fuel oil time spread was at a near two-month low of $5 a tonne on Tuesday, down from $5.50 a tonne in the previous session.
The 380-cst fuel oil cash premium also slipped to a near two-month low of $4.97 a tonne to Singapore quotes, down from $5.65 per tonne on Monday.
The September180 cst crack is higher at -$ 4.25 / bbl with the visco spread at $ 1.20 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Cal-19 Middle Distillates continue to firm up. We shall continue with our policy of scaling up hedging at appropriate levels should they continue firming. For now, targets are $ 18.75 in Jet and $ 18.50 in 10 ppm gasoil.
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.