Oil prices extended gains on Monday, this time on hopes of a Fed rate cut to stimulate growth. Brent crude gained 25 cents to settle at $63.71 a barrel, while WTI crude futures rose 67 cents to settle at $56.87 a barrel.
U.S. central bankers are expected to lower borrowing costs for the first time since the depths of the financial crisis more than a decade ago. U.S. President Donald Trump said a small Fed rate cut “is not enough.” Economic growth in the United States slowed less than expected in the second quarter, strengthening the outlook for oil consumption. Elsewhere, disappointing economic data has increased concerns about slower growth.
Japan’s factory output tumbled the most in nearly 1-1/2-years in June, adding to a slew of indicators suggesting slowing global growth and the bruising trade war were taking a toll on the export-reliant economy. Industrial output sank 3.6% in June, more than a median market forecast for a 2.0% drop
U.S. and Chinese negotiators meet this week for their first in-person talks since a G20 truce last month, but expectations are low after Trump said China might not want to sign a trade deal until after the 2020 U.S. election.
Sterling tumbled to a 28-month low on Monday as Prime Minister Boris Johnson said the Brexit divorce was dead and warned that unless the European Union renegotiated, Britain would leave on Oct. 31 without a deal
Asia’s naphtha crack edged up 34 cents to a one-week high of $29.78 a tonne on Monday, supported by demand.
South Korea’s Lotte Chem came forward to buy naphtha for delivery to Yeosu and Daesan in the first half of September at prices ranging from flat to premiums of about $1 a tonne to Japan quotes cost and freight (C&F).
GS Caltex has also bought for September, adding that the refiner could have paid a premium of about $3 a tonne to Japan C&F quotes.
These follow deals last week in which buyers SK Energy, Hanwha Total, KPIC and Titan snapped up cargoes of various grades at prices ranging from discounts to high single-digit premiums
The August crack is lower at -$ 6.40 /bbl
No fresh news on the gasoline markets.
The August crack is lower at $ 6.30 / bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash premiums for 10 ppm gasoil were at 21 cents a barrel to Singapore quotes on Monday, compared with Friday’s 17 cents per barrel.
Cash premiums for jet fuel were at 36 cents a barrel to Singapore quotes on Monday, compared with 30 cents per barrel on Friday.
The August crack for 500 ppm Gasoil is higher at $ 16.00 /bbl with the 10 ppm crack at $ 16.70 / bbl. The regrade is at +$ 0.10 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Backwardation in Asia’s front-month 380-cst time spread rose on Monday, nearing a record high set earlier in the month as tight supplies of the fuel in the Singapore storage and trading hub continued to push market premiums higher.
The 380-cst Aug/Sept time spread was at a backwardation of about plus $35 a tonne on Monday. This is up from plus $34 a tonne on Friday and close to the record of $35.75 a tonne on July 11.
The August 180 cst crack is lower at + $ 2.75 / bbl with the visco spread at $ 1.75 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh activity today
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.
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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.