Crude Oil

Oil prices dropped more than 1 percent on Tuesday on signs of rising supply and concern that global economic growth and demand for fuel will fall victim to the U.S.-China trade war. Brent crude futures  fell $1.43 cents to settle at $75.91 a barrel. U.S. crude settled 86 cents lower at $66.18 a barrel.

U.S. President Donald Trump said on Monday he thinks there will be “a great deal” with China on trade but warned that he has billions of dollars worth of new tariffs ready to go if a deal is not possible. Trump said he would like to make a deal now but that China was not ready. He did not elaborate.

China manufacturing PMI missed forecasts for a second month running, coming in at 50.2 v.s. expectations for a 50.6 print. Non-manufacturing PMI also disappointed at 53.9 v.s. forecasts of 54.9. 


The API reported another substantial build of  5.7 million barrels of crude stocks in its weekly report yesterday. This was a bit higher than market expectations of 4.1 million barrels. However, product stocks drew more than expected which is supportive for product cracks.


Asia’s naphtha crack rose to a three-session high of $62.60 a tonne after hitting a near 9-month low in the previous session as a lower oil price gave refiners a respite. But naphtha fundamentals were still weak, as excess supplies remained an issue.

The November crack is steady at – $ 4.45 / bbl


Asia’s gasoline crack recovered from a 27-month low to a two-session high of $2.28 a barrel on Tuesday, but was still 72.5 percent lower versus the start of the month. The market does not look like it is going to recover any time soon.

The November crack has improved to $ 3.80 /bbl.

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


Cash differentials for gasoil with 10ppm sulphur content  fell to 97 cents a barrel to Singapore quotes, compared with $1.63 a barrel on Monday. 

The Asian gasoil price spread between east and west  was around minus $20 a tonne on Tuesday, but it was still not quite profitable to ship gasoil cargoes to the west.

Meanwhile, cash differentials for jet fuel  flipped to discounts and were at a discount of 2 cents a barrel to Singapore quotes on Tuesday, compared with a premium of 2 cents on Monday.

The November crack has dropped to $ 16.70 /bbl with the 10 ppm crack at $ 17.60 /bbl. The regrade is higher at $ 0.50 /bbl

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

Fuel Oil

Asia’s front-month 180 cst fuel oil crack to Dubai crude slipped on Tuesday, after four straight sessions of gains to a record high in the previous session.

The November Singapore 180-cst fuel oil crack narrowed its premium to $1.06 a barrel to Dubai crude, compared with a record high of $1.61 a barrel on Monday.

Firm demand and concerns of tight prompt supplies of finished grade fuel oil in the Singapore storage and trading hub have helped boost fuel oil cash premium, time spreads and refining margins to fresh highs recently. However, further gains could be capped amid expectations of higher arbitrage flows into Asia in November.

The November 180 cst crack is lower at +$ 1.00 / bbl with the visco spread at $ 0.95 /bbl

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

Hedge Recommendations

Nothing fresh to report 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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