OREANDA-NEWS. SGX Oil&Gas Monthly Report - September 2016.


  • The oil market received one of its biggest surprises in recent memory when an informal OPEC meeting on 28 Sep in Algeria yielded what looked like the first agreement the cartel has reached since 2008. Initial details indicated an output level of between 32.5-33 million barrels per day, a cut of between 240,000-740,000bpd from current production of 33.24 million bpd. The market had been pessimistic about anything being agreed at this meeting.
  • Brent and WTI gained over 5% immediately after the news broke, though started giving back some of the gains as more information emerged. It became clear that an ironclad deal would only be signed at the formal OPEC meeting in Vienna at the end of November; important details such as the production limits per OPEC member still need to be worked out. And as it looks like the relationship between Iran and Saudi Arabia has warmed, this time it was Iraq who had something to say and was apparently the reason behind the agreement being a range rather than fixed at the target of 32.5 million bpd.


  • LNG had a strong month in September on the back of demand from India and South Korea, with the key Singapore Sling price index posting seven straight gains through the month. It started the month at $5.187/mmBtu and finished 10% higher at $5.711/mmBtu.
  • In response to market demand for more locations to be priced using the Sling methodology, SGX launched the second location in the Sling series – North Asia Sling – on 19 Sep. The pricing basis for North Asia Sling is DES cargoes to Japan, Korea, Taiwan and China, and the index will serve as the reference index for the North Asian countries that form the traditional centre of demand, while the Singapore Sling will serve as a key reference for the emerging and fast-growing South-East Asia region.
  • Japan’s Jera has continued to demonstrate its intention to enter the spot trading business, and it sold its first cargo to a customer outside of Japan – 60,000 tonnes of a resale cargo to the Gwangyang terminal in South Korea on a price relative to the Asian spot price.