Crude Oil
Oil prices continued to stay buoyant as traders keep a close watch on the Middle East following U.S. air strikes in Iraq and Syria. Brent crude settled 28 cents higher at $68.44 a barrel. WTI, however, fell 4 cents to $61.68 a barrel.
For the year, Brent has risen around 27% in 2019, and WTI is up about 36%.
China’s Dec’19 official manufacturing PMI remained stable month-on-month at 50.2 vs forecast of 50.1, while Dec’19 official services PMI fell to 53.5 from 54.4 in Nov’19.
Elsewhere, investors are closely watching events in the Middle East after the United States carried out air strikes on Sunday against the Kataib Hezbollah militia group, while protesters in Iraq on Saturday briefly forced the closure of its southern Nassiriya oilfield.
Looking ahead to 2020, some analysts cited abundant global crude stocks as a major obstacle to efforts to rein in output by the OPEC+ group.
Naphtha
Asia’s naphtha crack slumped 14.5% to a one-and-a-half week low of $83.90 a tonne on Monday, dragged down by muted trades amid the year-end holidays and the recent dreadful petrochemical margins.
Although premiums for Indian cargoes scheduled for January loading were down versus December, they were still significantly higher than most of the months in 2019. India’s BPCL sold 35 KT tonnes of naphtha to BP for Jan. 10-11 loading from Kochi at premiums of $44.50 to $45 a tonne to its own price formula on a free-on-board (FOB) basis. This was down from near-record high prices of $60 to $60.50 a tonne BPCL had fetched for a December cargo sold to Shell, Reuters data showed.
The January crack is lower at – $ 3.70 / bbl.
Gasoline
Gasoline inventories at ARA rose about 23% in the week to Friday to reach an almost two-and-a-half month high of 994 KT, data from Dutch consultancy Insights Global showed.
The January crack is lower at $ 6.50 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10 ppm gasoil were at 85 cents per barrel over Singapore quotes on Monday, compared with 91 cents per barrel on Friday.
The front-month time spread for 10 ppm gasoil , which have remained in firm backwardation over the last one month, widened on Monday to trade at a premium of 70 cents per barrel.
Cash premiums for jet fuel were at 20 cents per barrel to Singapore quotes on Monday, compared with a premium of 27 cents per barrel on Friday.
Gasoil stocks at ARA were marginally higher at 2.40 million tonnes, data from Dutch consultancy Insights Global showed.
The January crack for 500 ppm Gasoil is higher at $ 15.15 /bbl with the 10 ppm crack at $ 15.95 / bbl. The regrade is at -$ 0.65 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 0.5% VLSFO crack climbed to a record high of $29.04 per barrel above Brent crude during Asian trading hours on Monday, compared with $27.64 per barrel on Friday.
The January/February time spread widened its backwardated structure to trade at a premium of $14.25 per tonne on Monday, $2 higher from Friday.
Meanwhile, the 380-cst barge crack to Brent crude for January widened its discount to minus $27.45 per barrel on Monday from minus $27.34 on Friday.
Despite plunging demand from the shipping sector for the high-sulphur fuel grade, refining margins 380-cst HSFO would likely get some support around current levels, thanks to limited supplies and emerging pockets of demand in refining and power generation.
Asia’s cash premium for 380-cst HSFO rose to $18.01 per tonne to Singapore quotes on Monday, compared with $13.94 per tonne on Friday.
The cash differentials for 180-cst HSFO also climbed to $12.42 per tonne to Singapore quotes on Monday, up from $8.50 per tonne on Friday.
Fuel oil stocks at ARA rose by 58 KT to 923 KT in the week ended 26th December, data from Dutch consultancy Insights Global showed.
The January 180 cst crack is lower at -$ 19.85 / bbl with the visco spread at $ 1.50 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh action for 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.