Image credit: Freight Investor Services (FIS)

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Commentary

Oil slipped today, pulled down by record Saudi Arabian production even as OPEC's top producer pushes for supply cuts ahead of the group's meeting in Austria next week. Saudi Arabia raised oil production to an all-time high in November, an industry source said on Monday, pumping 11.1 million to 11.3 million (bpd) during the month. Oil prices have lost almost a third of their value since early October, weighed down by an emerging supply overhang and widespread financial market weakness.

"The oil price correction has become a rout of historic proportions," U.S. investment bank Jefferies said in a note on Tuesday. "The negative price reaction is as severe as the 2008 financial crisis and the aftermath of the November 2015 OPEC meeting, when the group decided not to act in the face of a very over-supplied market," it added.

Norbert Ruecker, head of commodity research at Swiss bank Julius Baer, said the weak sentiment "follows a surprisingly swift and pronounced change in the market mood from shortage fears to glut concerns," while the world economy was also slowing down. Traders said they were awaiting the outcome of the Group of 20 (G20) meeting in Buenos Aires and also the result of a meeting of the (OPEC).

The leaders of the G20 countries, which make up the world's biggest economies, meet on Nov. 30 and Dec. 1, with the trade war between Washington and Beijing atop the agenda. But with top crude producers Russia, the United States and Saudi Arabia all present, oil policy is also expected to be discussed. The G20 meeting will be followed by OPEC's annual meeting at its headquarters in Vienna on Dec. 6, when the producer cartel will discuss its output policy together with some non-OPEC producers, including Russia.

Fuel Oil Market (Nov 26)

The front crack opened at -3.65, strengthening to -3.60, before weakening to -3.90. The Cal 19 was trading between - 10.40 and -10.65 throughout the day.

The front-month Singapore 180 cSt fuel oil swap was at a premium of $4.47 a barrel above Middle East benchmark Dubai crude oil on Monday, up from 44.05 a barrel on Friday. The front-month fuel oil crack was at a record high of $4.47 a barrel on Nov. 20.

- Russia's fuel oil exports sank to 2.233 million tonnes in October, down 14 percent from September and 24 percent lower from the same time last year.

- Russian fuel oil exports were last lower in April 2008 at 1.116 million tonnes. This came as Russian fuel oil output fell to 3.735 million tonnes in October, down 5 percent from September and 5.5 percent lower from the year-ago

Economic Events:

2pm: U.S. FHFA House Price Index, Sept.

3pm: U.S. Conf. Board Consumer Confidence, Nov.

9:30pm: API issues weekly U.S. oil inventory report

Bloomberg-compiled Refinery Snapshot for U.S. and Canada; gives offline capacity projections for crude units and FCCs

Boomberg NEF Future of Energy APAC Summit in Shanghai, 1st day of 2

Speakers include JERA Chairman Hendrik Gordenker

Singapore 380 cSt

Dec18 - 396.25 / 398.25

Jan19 - 385.00 / 387.00

Feb19 - 376.25 / 378.25

Mar19 - 369.75 / 371.75

Apr19 - 364.00 / 366.00

May19 - 358.25 / 360.25

Q1-19 - 377.00 / 379.00

Q2-19 - 358.50 / 360.50

Q3-19 - 338.50 / 341.00

Q4-19 - 310.50 / 313.00

CAL19 - 345.50 / 348.50

CAL20 - 287.00 / 293.00

Singapore 180 cSt

Dec18 - 400.75 / 402.75

Jan19 - 389.75 / 391.75

Feb19 - 382.25 / 384.25

Mar19 - 376.75 / 378.75

Apr19 - 372.50 / 374.50

May19 - 367.25 / 369.25

Q1-19 - 383.00 / 385.00

Q2-19 - 367.50 / 369.50

Q3-19 - 350.00 / 352.50

Q4-19 - 327.00 / 329.50

CAL19 - 356.75 / 359.75

CAL20 - 308.25 / 314.25

Rotterdam 3.5%

Dec18 - 356.00 / 358.00

Jan19 - 348.50 / 350.50

Feb19 - 343.75 / 345.75

Mar19 - 339.00 / 341.00

Apr19 - 334.50 / 336.50

May19 - 329.75 / 331.75

Q1-19 - 343.75 / 345.75

Q2-19 - 329.75 / 331.75

Q3-19 - 310.75 / 313.25

Q4-19 - 280.00 / 282.50

CAL19 - 315.25 / 318.25

CAL20 - 262.75 / 268.75

0.1% Rott barges Gasoil

Dec18 - 561.61 / 563.61

Jan19 - 553.55 / 555.55

Feb19 - 552.91 / 554.91

Mar19 - 553.75 / 555.75

Apr19 - 554.04 / 556.04

May19 - 556.34 / 558.34

Q1-19 - 553.90 / 555.90

Q2-19 - 556.42 / 558.42

Q3-19 - 564.37 / 566.87

Q4-19 - 571.19 / 574.19

CAL19 - 559.66 / 563.66

CAL20 - 577.22 / 583.22

Sing GO 10ppm

Dec18 - 73.99 / 74.19

Jan19 - 74.39 / 74.59

Feb19 - 74.69 / 74.89

Mar19 - 74.89 / 75.09

Apr19 - 75.01 / 75.21

May19 - 75.08 / 75.28

Q1-19 - 74.56 / 74.96

Q2-19 - 74.81 / 75.21

Q3-19 - 75.66 / 75.96

Q4-19 - 76.41 / 76.81

CAL19 - 75.25 / 75.85

CAL20 - 76.81 / 77.41