Crude Oil
Crude oil bounced resumed its decline as non OPEC members refused to commit to dropping production levels before OPEC members committed to do so.
Brent settled 76 cents lower at $ 49.71 / bbl while WTI settled at $ 48.70 / bbl, $ 1.02 lower than the previous day.
Significantly, CFTC reported a decline in net long futures and options positions for the first time in 5 weeks, indicating a change in the overall outlook for crude. On the supportive side, the Baker rig count dropped by 2.
Naphtha
The Naphtha crack eased on Friday, but supply still continues to remain tight.
Levels for the Naptha crack in November should around Dubai flat.
Gasoline
The gasoline crack too eased a bit. However, it is expected to stay tight through the next couple of months
The crack appears to be in the region of $ 11.60 / bbl.
Middle Distillates
Middle distillate cracks are holding up in the prompt with gasoil quoting at around $ 13.50 / bbl. However, forward cracks appear to have eased off marginally.
Regrade continues to slide which does not augur well for jet cracks.
Fuel Oil
The fuel oil cracks too seem to have eased off their highs of last week with the November crack quoting at just below a discount of $ 3 /bbl to Dubai (-$3.04).
The IMO has decided to implement a cap on the maximum sulfur in Fuel Oil to 0.5% from the existing 3.5% by 2020. This is likely to have a high impact on fuel oil going forward especially when we combine it with the efforts of refiners to eliminate fuel oil from the product barrel by increasing the complexity of their refineries.
India may well turn into a net importer of fuel oil a few years down the line.
An extreme scenario envisages the substitution of fuel oil by gasoil!!!
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