Happy New Year
Today being the last trading day of the year, we take this opportunity to wish you a very Happy 2017 from Trifecta Consultants.
Crude Oil
Oil prices barely reacted to the crude build reported by the EIA. Brent fell by 8 cents to close at $ 56.14/bbl. WTI fell a bit more by 29 cents to settle at $ 53.79 / bbl. The apparently lacklustre reaction in Brent could be due to the expiry of the first future today.
The DOE reported stock levels as follows (figures in brackets indicate market expectations)
Crude +0.6 MB (-2.1 MB)
Gasoline – 1.8 MB (+1.3 MB)
Distillates – 1.9 MB (+1.8 MB)
Refinery run rates were down at 91% a 3 year low for this time of the year.
Ultimately, it would seem that refinery runs would have to increase in order to meet product demand. However, that could well be challenging as the US Gulf Coast refineries are planning turnarounds in 2017. However, shortage of availability of skilled labor could delay work and hence turnaround times.
Naphtha
The Naphtha physical crack to hover around the previous levels. However, physical supplies weighed on the market. The January crack rose marginally to around -$ 0.4 /barrel.
Gasoline
The gasoline market also eased marginally with the January crack valued at around $ 13.1 / bbl
Middle Distillates
The gasoil crack for January held steady at yesterday’s levels . The January crack was valued at $ 11.80 / bbl. However, the regrade for January $ 1.35 / bbl
Going forward, diesel cracks may have seen a bottom this year as China has reduced quotas for export of diesel by the majors by 40%. However, the tea pot refiners are not included in this cut. Having said that, diesel stocks in China were extremely low in November. Further, the next month would see an increase in demand for the product as Chinese New Year approaches.
Fuel Oil
Physical Fuel Oil prices appeared to be slightly stronger in a thin market. Fuel Oil stocks in dipped to 22 Million Barrels this week. The crack was marginally lower at -$1.50 /bbl for January and -$2.3 for February.
We would wait till the middle of next week to develop any further opinion on this product.
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.