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Commentary

Brent slipped $3 cents to settle at $64.33 a barrel and WTI crude gained $74 cents, or 1.2 percent, to settle at $61.34. With the Lunar New Year holiday in Asia, trading volume this morning is smaller than Trump's approval ratings. Technical support levels seem to be holding well around the $61.77 level as those long positions who sold out of positions on the fall down from $71 look for new entries. There is the huge elephant in the room of the U.S. production increase, but it's an elephant that seems to not bother many people in the room it's crammed into. "We'll just cut a bit more" seems the stock answer to deal with this problem. So instead of dealing with the elephant, they have just decided that the people in the room need to eat less, maybe lose a few non-essential limbs to make room for it. Like market autocannibalism, Saudi Arabia have signalled their response; now we all need to huddle round and watch as they take the first bite into themselves, and ultimately their market share.

Fuel Oil Market (February 15)

The front crack opened at -9.00, weakening to -9.65 across the day. The Cal 19 was valued at -14.50.

Asia's front-month high-sulphur fuel oil crack extended gains, further narrowing its discount to Brent crude amid weaker crude oil price.

Meanwhile, cash premiums for cargoes of 380-cst fuel oil firmed slightly despite the absence of buying interest for cargoes of the fuel in the Singapore trading window.

Trade activity has been muted in the Singapore window in February with just 160,000 tonnes of fuel oil changing hands since the start of the month. By comparison, 540,000 tonnes of fuel oil cargoes were traded in the first half of January and 360,000 tonnes in the first half of February last year

Singapore weekly onshore fuel oil inventories dropped 4 percent from their highest so far this year to 22.828 million barrels (about 3.41 million tonnes) in the week ended Feb. 13. Inventories dropped despite a 15% increase in weekly net fuel oil imports.

Economic Data and Events

* 1:30pm: U.S. Import Price Index for Jan., est. 0.6% (prior 0.1%); U.S. Housing Starts for Jan. est. 1,234k (prior 1,192k); U.S.n Building Permits for Jan., est. 1,300k

* 3pm: University of Michigan Sentiment for Feb. (prelim), est. 95.4 (prior 95.7)

* 6pm: Baker Hughes rig count

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

* 8:30pm: Commodity Futures Trading Commission weekly scheduled report on futures and options positions

Singapore 380 cSt

Mar18 - 359.25 / 361.25

Apr18 - 359.00 / 361.00

May18 - 358.50 / 360.50

Jun18 - 357.75 / 359.75

Jul18 - 356.50 / 358.50

Aug18 - 355.25 / 357.25

Q2-18 - 358.25 / 360.25

Q3-18 - 355.50 / 357.50

Q4-18 - 350.25 / 352.75

Q1-19 - 342.00 / 344.50

CAL19 - 307.00 / 310.50

CAL20 - 233.75 / 240.25

Singapore 180 cSt

Mar18 - 366.00 / 368.00

Apr18 - 365.50 / 367.50

May18 - 365.00 / 367.00

Jun18 - 364.50 / 366.50

Jul18 - 363.25 / 365.25

Aug18 - 362.00 / 364.00

Q2-18 - 365.00 / 367.00

Q3-18 - 362.25 / 364.25

Q4-18 - 357.25 / 359.75

Q1-19 - 349.75 / 352.25

CAL19 - 316.25 / 319.75

CAL20 - 249.50 / 256.00

Rotterdam Barges

Mar18 346.00 / 348.00

Apr18 345.75 / 347.75

May18 345.00 / 347.00

Jun18 344.00 / 346.00

Jul18 342.50 / 344.50

Aug18 340.50 / 342.50

Q2-18 344.75 / 346.75

Q3-18 340.25 / 342.25

Q4-18 331.00 / 333.50

Q1-19 322.25 / 324.75

CAL19 283.25 / 286.75

CAL20 219.75 / 226.25