Brent crude futures rose 21 cents, or 0.5%, to $45.17 a barrel by 0436 GMT and continued to rise in the early morning, reaching $45.73 by 0741GMT while U.S. WTI crude gained 10 cents, or 0.2%, to $42.52 a barrel. Both benchmarks jumped 5% last week, as the oil market looks to gather pace on a recovery from the Coronavirus on the hopes that consumption increases will not outweigh supply increases from Libya to name but one source of increased supply. This rise has continued into the European open
Results from the Oxford vaccine have been released and were bitter sweet, with only a 70% efficacy rate but on the positive side it is more accessible for a greater number of the population, with the price much less than those of Pfizer and Moderna and storage conditions need not be as cold, suiting the less developed regions.
India’s prime minister has declared that the nation will be doubling its oil refining capacity in the next five years, accelerating its original plans and timeline for the country’s capacity, even though the Coronavirus has blighted the economy. Modi had said in June that the country was looking to double output of refining over a period of ten years, but this has now been slashed in half to only five years to reach 500 million tonnes of refining capacity, up from the current 250 million tonnes at present. (Reuters)
Over the weekend, following a similar suit to that of the Indian oil and gas sector, Abu Dhabi have approved the five-year spending plan for ADNOC to the tune of $122 billion that will contribute to the new Murban futures contracts launching in the new year. With many IOCs reining in spending on oil and gas investment, ADNOC are still pushing ahead with planned expenditure and are well in track to meet their target of 5 million barrels per day by 2030. (S&P Global Platts)
Former energy minister of Saudi Arabia believes that the state will continue to export oil for decades, even though there is a global shift towards green and renewable energies are taking place. (S&P Global Platts)
INDEX: (MTD Estimates)
* Sing 380: 268.22
* Rott 3.5%: 247.90
* Sing 0.5%: 331.75
* Rott 0.5%: 309.28
MARKETS NEWS:
* Abu Dhabi Plans $122 Billion in Oil Spending to Boost Output
* UAE Tries to Lower Temperature in Dispute With OPEC+ Allies
* Oil Futures Curve Signals Strength for First Time in Months
* Americans on a Buying Spree Give Battered Diesel Market a Lift
* China Issues Third Batch of Oil Product Export Quotas: JLC
* Petronas Sets MCO Oil Adjustment Price at 80c/Bbl for Dec.
* Indonesia Explores Oil and Gas Stimulus, Tax Cuts to Lift Output
OTHER NEWS:
* BP Sells London HQ to Thomas Lau’s Firm for 250 Million Pounds
* New Mexico’s Proposed Methane Crackdown Not Enough, EDF Says
* Goldman Says Saudi Peg ‘Here to Stay,’ Though at Cost to Economy
OIL PRODUCT NEWS:
* ASIA OIL PRODUCTS: Reliance’s Naphtha; Demand in Emerging Asia
* EUROPE OIL PRODUCTS: Gasoline Crack; Cepsa Huelva FCC; Russia
* U.S. OIL PRODUCTS: Containers Through L.A. Lifting Oil Markets
ECONOMIC DATA: (Times are London.)
* China second batch of October trade data, including oil products trade breakdown
* Congo January crude loading schedule expected; other West Africa loading programs for January may be released in following days
Singapore 380 INDIC
Dec20 280.50 / 282.50
Jan21 277.25 / 279.25
Feb21 275.75 / 277.75
Mar21 274.50 / 276.50
Apr21 273.25 / 275.25
May21 272.00 / 274.00
Q1-21 275.75 / 277.75
Q2-21 272.00 / 274.00
Q3-21 268.75 / 270.75
Q4-21 265.75 / 268.75
CAL21 266.50 / 272.50
Rotterdam 3.5% INDIC
Dec20 261.75 / 263.75
Jan21 260.75 / 262.75
Feb21 259.75 / 261.75
Mar21 258.50 / 260.50
Apr21 257.25 / 259.25
May21 256.00 / 258.00
Q1-21 259.75 / 261.75
Q2-21 256.00 / 258.00
Q3-21 251.75 / 253.75
Q4-21 246.50 / 249.50
CAL21 250.50 / 256.50
Singapore VLSFO 0.5% INDIC
Dec20 351.75 / 356.75
Jan21 349.50 / 354.50
Feb21 348.50 / 353.50
Mar21 347.75 / 352.75
Apr21 347.75 / 352.75
May21 347.75 / 352.75
Q1-21 348.50 / 353.50
Q2-21 347.75 / 352.75
Q3-21 348.50 / 354.50
Q4-21 350.00 / 356.00
CAL21 348.25 / 354.25
Rott VLSFO 0.5% INDIC
Dec20 326.50 / 331.50
Jan21 326.50 / 331.50
Feb21 327.00 / 332.00
Mar21 327.50 / 332.50
Apr21 328.00 / 333.00
May21 328.50 / 333.50
Q1-21 327.00 / 332.00
Q2-21 328.50 / 333.50
Q3-21 329.50 / 335.50
Q4-21 331.25 / 337.25
CAL21 328.75 / 334.75
Sing 10ppm GO INDIC
Dec20 49.82 / 49.96
Jan21 49.95 / 50.15
Feb21 50.23 / 50.43
Mar21 50.57 / 50.77
Apr21 50.91 / 51.11
May21 51.24 / 51.44
Q1-21 50.20 / 50.50
Q2-21 51.19 / 51.49
Q3-21 52.29 / 52.59
Q4-21 53.08 / 53.38
CAL21 51.64 / 52.04
ICE Gasoil 10ppm INDIC
Dec20 369.89 / 371.89
Jan21 373.73 / 375.73
Feb21 377.58 / 379.58
Mar21 380.20 / 382.20
Apr21 382.96 / 384.96
May21 385.57 / 387.57
Q1-21 377.15 / 379.15
Q2-21 385.59 / 387.59
Q3-21 392.98 / 394.98
Q4-21 397.95 / 399.95
CAL21 388.42 / 390.42
Iron ore had been looking vulnerable earlier in the week with the daily candles for the last 3 day’s closing higher but lacking any real momentum with the candles producing small bodies. The technical aspect of the market looks like it could exhaust soon; however, rising steel prices, a small easing in the stockpiles and rising steel margins have kept the futures well supported. Bloomberg steel margins have finished the week at CNY 302, up 50 CNY in three days, suggesting the trend might not be over just yet. The technical says the trend is exhausting; but without a drop in the margins the mills will continue to draw ore and maintain a high output to satisfy evidential demand.
Capesize futures had been threatening an upside move in the early part of the week, with downside price action failing to follow through on more than one occasion. The physical has been showing signs of improvement, leaving the December to close out the week USD 1,400 off the low, at USD 13,500, + 0.9% from yesterday and up USD 125 on the week. There is indecision in the Capesize market at these levels, seasonality would point to a small rally which could be the only reason the market is seeing support. Miners have been taking ships, but the urgency is not there. If the daily futures close above the 55 period MA and hold above it then, we could have a situation where the market becomes self-fulfilling, as charters will then be obliged to cover contracts. Q1 futures closed + 1.5% at USD 8,225 and the Cal 21 + 0.2% at USD 12,975.
The Panamax market was up 4.7% last week and 7.7% this week. Sentiment remains good and the market is well supported, but the futures have finished the week flat. December closed -0.7% to USD 10,600, the Q1 21 +0.7% to USD 8,625 and the Cal 21 +1% at USD 9,975. Next week will be make or break for the Panamax, if we correct at these levels there is still a vulnerability to the market. However, if we keep pushing then this pullback could have enough legs to give it a 12k handle in the coming weeks.
Supramax futures were very quiet today, rates were slightly firmer, but the reality is there was very little changing hands outside of the Cal 21. Dec closed the week at USD 10,275 +0.7% with the Q1 21 at USD 8,150 and the Cal 21 at USD 9,112; both up 0.3%.
The Brent futures continue to hang in there with price trading at USD 44.45 + 0.6% but still has not made that higher high that we were looking for earlier in the week. Headlines still aim towards the COVID vaccine, with futures up for a third week in a row, and they are but for the last 3 days oil has not really moved. Oil is not ready to go down, the technical has not been enough to push it up, so now we need some good news. If we get it, then we still think this could trade with a USD 48 handle. If we do not, then the 3 days of a rudderless market that we have witnessed might leave the futures starting to look like a sell.
Does Oil have a Thanksgiving rally?
It is a wrap
Data source FIS and Bloomberg
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