The oil complex was attempting a rebound in mid-morning US trading Monday, with ICE January Brent testing overnight highs around $2.10 higher at $60.90/b and NYMEX January WTI up $1.74 at $52.16/b.
Prompt NYMEX December RBOB surged 5.91 cents to $1.4504/gal with stronger crude, while December ULSD rose 3.38 cents to $1.9100/gal.The market is looking for signs of an OPEC-led output cut to stem the massive selloff of late, which has seen prompt Brent plummet more than 30% since trading above $86/b October 3.
In particular, traders are eyeing the G20 summit, scheduled to take place at the end of the week in Buenos Aires, Argentina. Saudi, Russian and US leaders all are likely to attend. Analysts Monday said a cut was expected, but talk ranged from 500,000 b/d on the low side to 1.4 million b/d on the high side.
Price Futures Group analyst Phil Flynn said Monday that the Saudis were likely to opt for a subtle cut rather than risk raising the ire of US President Donald Trump.
"Well, we know that the Saudis are afraid of the all-powerful presidential tweet," Flynn said. "Instead of shock-and-awe with a major cut, the Saudis are going to try to finesse the market with a big cut that does not feel like a big cut.
The spot market offers a mixed picture of both bullish and bearish fundamentals. On the bullish front, Nexen is expected to keep the North Sea Buzzard field closed for an undetermined period due to corroded pipelines, which will affect loadings of Forties, the largest by-volume contributor to the Dated Brent stream.
Further, a swath of Asian refinery capacity is returning to the market. PetroChina's 410,000 b/d Dalian Petrochemical refinery in northeastern Liaoning province is now back online after completing maintenance November 10.
And India's BPCL looks set to restart a hydrocracker at its 240,000 b/d Mumbai refinery at the end December or early January.
Additionally, Japan's largest refiner, JXTG Nippon Oil & Energy, said Monday it had restarted Sunday the 90,200 b/d No. 2 crude distillation unit at its Mizushima-B plant after completing scheduled maintenance. Following the restart of JXTG's No. 2 Mizushima-B CDU, there are no other refinery units in Japan that are currently undergoing scheduled maintenance.
Still, Asian product markets remain weak.Singapore 92 RON cracks against ICE Brent were again in the red, closing at minus 2 cents/b Monday. Chinese refiners are already reporting a build in gasoline stocks as demand retreats from its holiday-season high.
A source from Sinopec Luoyang in central China said sales companies were taking fewer cargoes from its refinery, while another refinery source said PetroChina was also grappling with rising gasoline stocks.
The Asian gasoil market remained in the doldrums Monday on sagging demand and ample supply. The weakness has punctured the lofty gasoil cracks against front-month cash Dubai crude levels seen earlier in November, which had seemed resilient and had remained rangebound at plus $17-$18/b even as gasoil was tumbling.
Singapore jet has been weighed down by ample supply. Data out late Thursday from Enterprise Singapore put combined middle distillate stockpiles in Singapore at a three-month high of 11.073 million barrels in the week that ended November 21.
FOB Singapore jet cargoes were assessed at the Mean of Platts Singapore strip minus 69 cents/b Monday. The grade was last weaker October 3.
