Crude Oil
Oil prices settled lower on Monday, pressured by a strengthening dollar and rising U.S. crude output, but prices remained on track for the biggest January increase in five years. Brent crude futures for March delivery settled down $ 1.06,to $ 69.46 /bbl, after rallying to a session high of $ 70.64. WTI fell 58 cents, to close at $65.56 /bbl.
There were no other drivers to the market which is already overheated and long. The API will release their weekly report late this evening.
Naphtha
There appears to be no respite for the naphtha crack which slid further to $ 73.45 /MT on Monday. Although more buyers are seen entering the market for March cargoes, the excess supplies and high inventories will take time to balance itself against demand.
The February paper naphtha crack has improved marginally to -$ 0.20 /bbl .
Gasoline
Continuing its recent streak, the Asian gasoline crack (to Brent) once again posted a gain settling at nearly a one-and-a-half month high of $ 8.86 /bbl.
In other news, China’s gasoline stockpile increased 4.7 % to around 8.62 million MT by the end of December 2017, the highest since at least 2010.
Notwithstanding the above, the February paper 92 Ron gasoline crack has improved to $ 13.05 /bbl today. The March crack is valued at $ 13.35 / bbl. We would recommend hedging the March gasoline crack at these levels. While the February crack is also hedgable, momentum may just drive it higher, hence we would watch it for a day and take the risk of losing the hedge.
Distillates
Distillate cash market was muted yesterday with the Platts Trading Window only witnessing a lone 500 ppm gasoil trade at a discount of 30 cents a bbl to Singapore quotes.
The February paper gasoil crack has risen slightly to $ 15.90 /bbl The 10 ppm crack is at $ 16.75 /bbl. The February regrade has dipped to $ 0.20 /bbl.
Hedging recommendations made earlier are being retained (until they are squared off).
February 2018 Gasoil 10 ppm $ 16.15/bbl : Jet $ 15.50/bbl (add more at $ 16.75 / bbl and $ 16.00 / bbl)
4Q 2018 Gasoil 500 ppm $ 15.35 /bbl : Gasoil 10 ppm $ 16.20 /bbl : Jet $ 16.00 /bbl.
1Q 2019 Gasoil 500 ppm $ 15.85 /bbl : Gasoil 10 ppm $ 16.80 /bbl : Jet $ 16.55 /bbl
We would also recommend hedging Cal 2019 (for aggressive hedgers) at
Cal 2019 Gasoil 500 ppm $ 16.10 /bbl : Gasoil 10 ppm $ 17.05 /bbl : Jet $ 16.85 /bbl
Fuel Oil
Fuel Oil cracks have risen amid an active Platts Trading Window which saw three cargoes of 380-cst fuel oil totaling 60,000 MT change hands. Interestingly, Hin Leong was the buyer of all three cargoes at an identical price of $2 a tonne premium to Singapore quotes.
The February 180 cst crack is higher at -$ 5.35 /bbl. The visco spread remains at $ 0.95 / 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