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Commentary

Brent closed up $0.54 to $63.31, WTI closed at $57.04, up $0.44. Well, it's all very range-bound to be honest. Granted, the Brent structure has taken a spike as those Victorian pipelines the Forties system use have cracked. I'm pretty sure that is the tip of the iceberg though, but we shall see. Week on week, Brent is up 1.8%. I read yesterday that Kuwait sees oil demand up 1.5mn bbls next year. Punchy. Then at the bottom of the story, I read that Kuwait wants to increase production to 4mn bpd by 2020. They currently produce around 2.8mn bpd. I'm not surprised you see demand picking up based on the fact you're going to increase production by 40pct, mate! It sounds like once we get to the end of the OPEC cut agreement, we could very quickly see a flood of bbls back in the market. This, I think, will be priced in come 2H 18 and down we go before the OPEC cut is then extended again. It sounds like we could have a messy divorce on our hands once the agreement comes to an end, but which divorce is ever not messy? What else is going on. Well, the buzz word of the year in the oil market has been refining margins. They have performed better than anyone could have possibly hoped, but will they continue to last? I think we really need some tangible evidence of product demand increasing before that bandwagon will continue to roll.

Fuel Oil Market (December 14)

The front crack opened at -9.30, strengthening to -8.90,before weakening to -9.00 across the day. The Cal 18 was valued at -8.25.

The discount of Asia's January 180 cSt fuel oil crack to Brent crude was at its narrowest in a week on Thursday as fuel oil inventories in Singapore slipped to a two-week low.

The front-month fuel oil crack on Friday marked the widest in eight months on signs of weaker demand and rising inventories of the fuel across key storage hubs.

Singapore inventories fell 4.1%, or 983,000 barrels (about 147,000 tonnes), to a two-week low of 23.214 million barrels (3.46 million tonnes) in the week ended Dec. 13. This came as net imports into Singapore fell 10 percent from the previous week to a two-week low of 934,000 tonnes.

Economic Data/Events: (UK times)

* 1:30pm U.S. Dec. Empire State manufacturing survey, est. 18.7, prior 19.4

* 2:15pm U.S. Nov. industrial production m/m, est. 0.3%, prior 0.9%

* 6pm Baker Hughes rig count

* ~6pm ICE weekly commitments of traders report for Brent, gasoil

* 8:30pm CFTC weekly commitments of traders report on various U.S. futures and options contracts

Singapore 380 cSt

Jan18 - 357.25 / 359.25

Feb18 - 356.75 / 358.75

Mar18 - 356.75 / 358.75

Apr18 - 356.50 / 358.50

May18 - 356.00 / 358.00

Jun18 - 355.25 / 357.25

Q1-18 - 357.00 / 359.00

Q2-18 - 356.00 / 358.00

Q3-18 - 352.25 / 354.75

Q4-18 - 347.25 / 349.75

CAL18 - 351.25 / 354.25

CAL19 - 318.25 / 323.25

Singapore 180 cSt

Jan18 - 361.50 / 363.50

Feb18 - 361.50 / 363.50

Mar18 - 361.75 / 363.75

Apr18 - 362.00 / 364.00

May18 - 361.75 / 363.75

Jun18 - 361.00 / 363.00

Q1-18 - 361.75 / 363.75

Q2-18 - 361.75 / 363.75

Q3-18 - 358.50 / 361.00

Q4-18 - 353.75 / 356.25

CAL18 - 357.00 / 360.00

CAL19 - 327.00 / 332.00

Rotterdam 380 cSt

Jan18 341.25 / 343.25

Feb18 342.00 / 344.00

Mar18 342.50 / 344.50

Apr18 342.25 / 344.25

May18 341.50 / 343.50

Jun18 340.50 / 342.50

Q1-18 341.75 / 343.75

Q2-18 341.25 / 343.25

Q3-18 336.50 / 339.00

Q4-18 328.00 / 330.50

CAL18 336.00 / 339.00

CAL19 296.00 / 301.00