Oil reversed course and rose as much as 2 percent on Thursday, after industry sources said Russia had accepted the need to cut production, together with OPEC ahead of its meeting next week. Brent crude futures rose 75cents to settle at $59.51 a barrel. WTI crude settled $ 1.16 higher at $51.45 a barrel.
Oil retreated from session highs after the U.S. Federal Reserve released minutes of the latest policy meeting showing interest rate hikes are expected soon. The dollar index edged higher against a basket of currencies, pressuring prices of dollar-denominated oil.
U.S. President Donald Trump said he was close to making a deal with China on trade but is not sure he wants to do it and likes where things stand now. This is a step which is not likely to raise confidence in the market. Growth in China’s vast manufacturing sector stalled for the first time in over two years in November as new orders shrank, adding pressure on Beijing ahead of high-stakes trade talks between presidents Xi Jinping and Donald Trump this weekend.
President Trump also abruptly canceled a planned meeting with Russian President Vladimir Putin in Argentina, registering his disapproval of Russia’s treatment of Ukraine and casting new uncertainty over U.S.-Russian ties.
The naphtha crack to Brent crude climbed to a six-session high of $33.70 a tonne on Thursday, up from $29.48 a tonne on Wednesday, and marking three straight sessions of gains.
The December crack has improved to -$ 4.40 /bbl
The Singapore 92 RON gasoline crack against Brent crude narrowed its discount to 87 cents a barrel on Thursday, up from a discount of $1.10 a barrel on Wednesday.
Singapore inventories of light distillates climbed to a near four-month high of 14.375 million barrels in the week to Nov. 28, up by 7 percent, or 931 KB from the week before. This week’s inventories of light distillates were 29 percent higher than a year earlier. Singapore light distillate inventories averaged 13.32 million barrels per week so far this year, compared to the 2017 average of 12.736 million barrels.
The December crack has jumped up to $ 1.35 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Cash differentials for 10ppm gasoil were at a discount of 43 cents a barrel to Singapore quotes on Thursday as compared to 45 cents a barrel to Singapore quotes on Wednesday.
Asia’s refining margins for 10ppm gasoil fell for a third consecutive session on Thursday in anticipation of a flood of stocks from China. The December/January time spread for 10ppm gasoil was at a discount of 37 cents per barrel on Thursday.
Middle Distillates stocks in Singapore fell by 304 KB to 10.77 million barrels. This is marginally lower than the previous year’s level.
Cash differentials for jet fuel were at a discount of 70 cents a barrel to Singapore quotes, compared with a discount of 69 cents a barrel a day earlier.
The December crack has dropped to $ 13.00 /bbl with the 10 ppm crack at $ 13.75 /bbl. The regrade is at $ 2.70 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Asia’s fuel oil market softened on Thursday as concerns over constricted near-term supplies eased amid expectations of steady arbitrage arrivals over the next few weeks.
Fuel oil cracks, time spreads and arbitrage spreads were all weaker on Thursday. The December 380-cst barge fuel oil crack to Brent crude was trading at about minus $5.50 a barrel on Thursday, down from a discount of $4.54 a barrel earlier in the day. On Wednesday, the front-month crack settled at minus $4.54 a barrel and was down from a more than two-year high of minus $3.45 a barrel on Nov. 23.
This came as Singapore fuel oil inventories jumped 1.025 million barrels to 18.93 million barrels in the week to Nov. 28, data from Enterprise Singapore showed. The inventories were last higher in the week to July 18 at 19.62 million barrels. This week’s onshore fuel oil inventories were 18 percent lower than a year earlier.
The December 180 cst crack has crashed even further to +$ 1.45 / bbl with the visco spread at $ 0.55 /bbl
Click Here for a graphical depiction of Fuel Oil stocks by region.
No fresh comments as of now. We are able to close out a couple of more hedges 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.
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.