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Commentary

Brent closed last night at $63.32 up $0.75 and WTI closed up $1.19 to $58.02. EIA data stoked some more buying interest into the bulls and up up up we went. The bull march seems relentless and it wouldn't surprise me if some lunatic was to bid the market up to $70 on Brent before next week's OPEC meeting. I read yesterday that "The Saudi's are going for an extension of the cuts for another 9 months". Gee thanks Sherlock. Of course they are! In fact I'm pretty sure it's already agreed but headlines like this are required just to push flat price further up for even the most naive traders. Let me explain why I'm so sceptical about the extension of the cuts. I read a brilliant article yesterday: according to many experts across the pond, the US no longer needs military might to secure oil. They are not at the mercy of an OPEC oil embargo and the consumer in the US will never have to go through shortages at the pump like they did in 1973. The US will, without question of doubt, be the biggest oil producer in the world in the next five years. They are producing four times as much at half the cost than they were just two years ago. The investment in technology has meant that fracking allows even the smallest of Texan producers to explore an oil well not vertically, but horizontally, meaning more can be extracted, which in turn lowers costs. Shale oil in the US is only a decade old. JP Morgan predict that shale oil production will grow by 7mn bpd between now and 2025. Seven million! Seven million barrels per chuffing day! That will take them to between 10-16mn bpd; 50pct more than anyone else globally. Now the question is whether the U.S. can or will bring that huge oil producing potential all online. It's one thing to say it's there, it's another to extract it. No wonder the Saudis are diversifying out of oil; they won't be kings for too much longer.

Fuel Oil Market (November 22)

The front crack opened at -8.45, strengthening to -8.35, before weakening to -8.50. The Cal 18 was valued at -7.85.

Asia's December 180 cSt fuel oil crack to Dubai crude slipped to a near six-week low, extending losses for a third session straight. Selling pressure has weighed on fuel oil cracks since the start of the week amid concerns of rising Russian fuel oil exports.

Total fuel oil flows into East Asia for November are on track to close at nine-month high levels of above 7 million tonnes for the month. The flows are boosted by rebounding Western arrivals, near record-high inflows from the Middle East and 11-month high intra-Asia volumes.

Fujairah inventories rose 16 percent, or 1.321 million barrels (about 197,000 tonnes), from a week ago to an eight-week high of 9.641 million barrels (1.44 million tonnes) in the week ended Nov. 20.

Economic Data/Events: (UK times)

* 8am: Singapore onshore oil-product stockpile data

* ~12pm: Russian refining maintenance schedule from ministry

* Today, no exact timing:

** China International Oil & Gas Trade Congress in Shanghai, Nov. 22-24. Speakers include executives from PetroChina, Sinopec, Cnooc, Sinochem, Aramco, Dongming

** China final October commodity & energy trade data, including copper, zinc, ores as well as country breakdowns of crude oil, soybean, corn imports (delayed until future notice)

** OPEC's Economic Commission Board meets in Vienna to discuss the oil market before the group's ministerial meeting, 1st day of 2

** Nymex WTI halts early at 1pm ET due to Thanksgiving holiday; closes at 1:45pm ET on Friday

Singapore 380 cSt

Dec17 - 361.75 / 363.75

Jan18 - 360.50 / 362.50

Feb18 - 359.25 / 361.25

Mar18 - 358.00 / 360.00

Apr18 - 356.75 / 358.75

May18 - 355.25 / 357.25

Q1-18 - 359.25 / 361.25

Q2-18 - 355.25 / 357.25

Q3-18 - 350.25 / 352.75

Q4-18 - 345.25 / 347.75

CAL18 - 353.75 / 356.75

CAL19 - 319.25 / 324.25

Singapore 180 cSt

Dec17 - 365.75 / 367.75

Jan18 - 364.75 / 366.75

Feb18 - 364.00 / 366.00

Mar18 - 363.25 / 365.25

Apr18 - 362.50 / 364.50

May18 - 362.00 / 364.00

Q1-18 - 364.00 / 366.00

Q2-18 - 361.50 / 363.50

Q3-18 - 356.75 / 359.25

Q4-18 -351.75 / 354.25

CAL18 - 360.00 / 363.00

CAL19 - 328.00 / 333.00

Rotterdam 380 cSt

Dec17 343.25 / 345.25

Jan18 343.00 / 345.00

Feb18 342.50 / 344.50

Mar18 342.00 / 344.00

Apr18 341.25 / 343.25

May18 340.25 / 342.25

Q1-18 342.50 / 344.50

Q2-18 340.25 / 342.25

Q3-18 335.25 / 337.75

Q4-18 326.75 / 329.25

CAL18 336.75 / 339.75

CAL19 298.25 / 303.25