Crude Oil

Oil prices stayed in the negative zone for most of Tuesday. However, Brent prices staged a smart recovery to end the day marginally positive. Brent crude futures rose 2 cents to settle at $61.59 a barrel. WTI crude futures fell 27 cents to settle at $55.54 a barrel..

Brent futures fell to as low as $60.66 before recovery WTI registered a low of $ 54.61.

The United States and China were continuing to work on an interim trade agreement, but it may not be completed in time for U.S. and Chinese leaders to sign it in Chile next month. The clarification of previous White House statements, that U.S. President Donald Trump and Chinese President Xi Jinping were expected to sign “phase one” of the trade deal, stymied oil market optimism that had reversed earlier losses and lifted U.S. equities.

But signs of tension between the United States and China after a nearly 16-month trade war are still fluid and have had an outsized impact on crude prices. Market participants believe the trade war has spooked investors and slowed global economic growth, crimping oil demand.

The US and 22 other countries at the UN pushed China on Tuesday to stop detaining ethnic Uighurs and other Muslims, prompting China’s UN envoy to warn it was not “helpful” for trade talks between Beijing and Washington. 

Top shipping, retail and transport companies are looking to develop an alternative marine fuel which aims to reduce carbon emissions from ships, which accounts for 2.2% of global carbon dioxide emissions according to the IMO, in another step to push the sector to go green

API data

The data reported by the API was decidedly bullish given the significant draw in gasoline stocks. The crude draw may not be regarded as that bullish given the disparity between the API and DOE last week.  Product stocks are generally falling mainly due to the low level of refinery runs is our estimate.


No fresh news on the naphtha markets.

The November crack is marginally higher at – $ 2.75 / bbl.


Asia’s gasoline crack fell to a seven-week low of $6.07 a barrel on supply growth because of high Chinese exports.

Demand in India, however, has held firm because the country relies on some imports to plug its supply gap as refineries are upgraded to produce cleaner fuels. Indian Oil Corp was looking to import up to 279 KT of gasoline for December to March arrival at Chennai, Haldia and Kandla. India’s Hindustan Petroleum Corp  bought PetroChina International Co’s first gasoline cargo to be shipped out of Qinzhou Port.

China’s WEPEC, meanwhile, offered a 34 KT parcel of 91-octane grade gasoline for loading between Nov. 29 and Dec. 1 from Dalian through a tender closing late on Tuesday.

The November crack is marginally higher at $ 7.35 /bbl

Click Here for a graphical depiction of Global Gasoline stocks by region.


Asia’s cash premiums for 10 ppm gasoil slipped on Tuesday amid weaker deal values in the physical market. Cash premiums for 10ppm gasoil dipped to $1.03 a barrel to Singapore quotes on Tuesday, down from $1.13 a barrel on Friday.

The gasoil cash differentials at the moment are nearly three times higher than levels a month earlier. The market for the industrial and transportation fuel is expected to get a major boost over the next few months as some shippers switch to marine gasoil (MGO) to comply with new rules from the IMO for ships to burn cleaner fuels. IMO 2020 is expected to boost gasoil demand in a range of about 1.4 -2.0 million barrels per day.

Cash premiums for jet fuel fell to a premium of 15 cents a barrel to Singapore quotes on Tuesday, compared with a 35-cent premium on Friday.

The November crack for 500 ppm Gasoil is lower at $ 16.00 /bbl with the 10 ppm crack at $ 17.00 / bbl. The regrade is at   $ 0.10 /bbl 

Click Here for a graphical depiction of Global Distillate stocks by region.

Fuel Oil

Asia’s front-month high-sulphur fuel oil (HSFO) viscosity spread narrowed to its tightest in nearly three weeks on Tuesday. Tightening supplies of 380-cst HSFO, the bunkering industry’s primary fuel, coupled with little demand for 180-cst HSFO helped narrow the viscosity spread.

Singapore supplies of 380-cst HSFO have steadily declined in recent months as the global bunkering industry prepares for stricter rules limiting sulphur content in marine fuels from 3.5% currently, to 0.5% starting 2020. The November viscosity spread slipped 50 cents a tonne on Tuesday to $12.50 a tonne, its lowest since Oct. 9.

The November 180 cst crack is marginally higher at -$  15.70 / bbl with the visco spread at  $ 1.90 /bbl.

Click Here for a graphical depiction of Fuel Oil stocks by region.

Hedge Recommendations

No fresh recommendations 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.

Disclaimer : All the views are the author’s personal views. These do not constitute an advice to buy or sell any commodity

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