---

Commentary

Brent crude oil futures rose to $70 a barrel early on today, supported by cuts led by OPEC and Russia, although they dipped back to $69.80 a barrel by 0739 GMT, down $6 cents from their last close as the rise in North American drilling weighed. U.S. WTI crude futures were at $64.35 a barrel, up $5 cents from their last settlement. So, the market has finally poked its head above the $70 level and then quickly retreated back. With Iraq joining in with the calls from other OPEC members to adhere to the cuts for the whole period of 2018 agreed leading the bullish sentiment this morning, there has been some dampening of this with the news of an increase in U.S. rig counts weighing on the market. It is a pretty slippery rope that oil price is climbing, but damn has it got some purchase recently. You'll likely see some pullback/correction up at these levels; people will be taking profit as they get nervous up at these levels. Like dipping your toe in too hot bath water, people will say to themselves: "Oh, hell no!" and quickly reel back. But eventually it will become a more bearable temperature. The same is true of this oil market. Do not underestimate this markets ability over time to creep up on you, and, before you know it, we are $10 higher.

Fuel Oil Market (January 12)

The front crack opened at -10.95, weakening to -11.20, before strengthening to -11.15. The Cal 19 was valued at -11.90.

Asia's front-month fuel oil crack narrowed its discount amid weaker crude oil prices on Friday and a drop in Singapore onshore inventories this week, trade sources said.

Still, concerns of sluggish demand and ample supplies in the near term weighed on the February fuel oil crack, which closed the week lower after having extended its discount to the widest since October 2016 on Wednesday.

Fuel oil stocks in ARA climbed 10%, or 96,000 tonnes, from the previous week to a total of 1.035 million tonnes in the week ended Jan. 11. ARA fuel oil inventories were 43% higher than a year earlier, and were above the five year average of 969,000 tonnes for this time of the year.

Economic Data and Events

* Martin Luther King, Jr., federal holiday in U.S.

* CME trading opens 6pm ET Sunday, before halting at 1pm ET, trading then resumes 6pm ET Monday with regular close on Tuesday

* Russia partial loading program for February

Singapore 380 cSt

Feb18 - 378.50 / 380.50

Mar18 - 379.00 / 381.00

Apr18 - 379.00 / 381.00

May18 - 378.75 / 380.75

Jun18 - 378.25 / 380.25

Jul18 - 377.75 / 379.75

Q2-18 - 378.50 / 380.50

Q3-18 - 376.75 / 378.75

Q4-18 - 372.75 / 375.25

Q1-19 - 365.00 / 367.50

CAL19 - 344.75 / 347.75

CAL20 - 293.25 / 298.25

Singapore 180 cSt

Feb18 - 383.00 / 385.00

Mar18 - 384.00 / 386.00

Apr18 - 384.00 / 386.00

May18 - 384.00 / 386.00

Jun18 - 383.50 / 385.50

Jul18 - 383.25 / 385.25

Q2-18 - 383.75 / 385.75

Q3-18 - 382.25 / 384.25

Q4-18 - 378.75 / 381.25

Q1-19 - 372.75 / 375.25

CAL19 - 353.50 / 356.50

CAL20 - 302.50 / 307.50

Rotterdam Barges

Feb18 365.75 / 367.75

Mar18 366.75 / 368.75

Apr18 367.00 / 369.00

May18 366.75 / 368.75

Jun18 366.25 / 368.25

Jul18 365.00 / 367.00

Q2-18 366.50 / 368.50

Q3-18 363.00 / 365.00

Q4-18 354.75 / 357.25

Q1-19 346.75 / 349.25

CAL19 324.00 / 327.00

CAL20 274.00 / 279.00