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Commentary

Brent closed up $0.83 last night to $65.67, WTI was flat at $61.68, owing to a US holiday. Well, as expected, yesterday's activity was about as interesting as dinner with a tax auditor. Let's be honest, it has been a fairly hesitant and jumpy start to the year across all markets. Just look at cable, equities and cryptocurrencies for proof of that. There was an interesting analyst presentation on the oil market this week that made a very good point on the supply vs demand conundrum: oil depletion (the rate at which current oil producing regions lose production) is around 5 million barrels every two years, and then if you add a conservative 1.3 million barrel increase a year (last year was 1.6 mil), over the next 4 years there will be a 15.2 mil increase in demand needed. So in some ways it is imperative that the U.S. start producing more if OPEC are to continue the cut, especially so if you think that investment in new oil exploration has halved. In the near future, this could come to crunch time and lead to higher prices, and then, if you couple this with the complications of 2020 and the sulphur regulations, that could be a very bullish year indeed. Good day.

Fuel Oil Market (February 19)

Cracks edge higher despite rising crude closing -9.75.

Asia's front-month high-sulphur fuel oil crack narrowed it's discount to Brent crude on Monday, clawing back some losses from the previous week. The March 180 cSt fuel oil crack to Brent crude was trading at about minus $6.65 a barrel by the end of Asia trading hours, compared with a one-week low of minus $7.02 in the previous session. Oil prices extended gains to hit their highest level in nearly two weeks on Monday, buoyed as Asian shares joined a global recovery in equity markets and as worries grew over tensions in the Middle East. O/R

Window Trades: Four cargo trades were reported in the Singapore trading window, totalling 80,000 tonnes of 380 cSt fuel oil. Hin Leong bought all four 20,000-tonne cargoes, two from Vitol and one each from Total and Shell. A total of 240,000 tonnes of fuel oil have traded in the window in February so far, against 1.16 million tonnes in January.

Economic Data and Events

* 2:30pm: BP releases Energy Outlook 2018, which includes its projections for global energy markets to 2035

* IP week starts; click here for agenda. Today's speakers include U.A.E. Energy Minister Suhail Al Mazrouei, BP CEO Bob Dudley, among others

* Nigeria Petroleum Summit in Abuja, 2nd day of 5

* Russia 10-day Urals program for March

Singapore 380 cSt

Mar18 - 362.25 / 364.25

Apr18 - 362.00 / 364.00

May18 - 361.75 / 363.75

Jun18 - 361.00 / 363.00

Jul18 - 359.50 / 361.50

Aug18 - 358.25 / 360.25

Q2-18 - 361.75 / 363.75

Q3-18 - 358.75 / 360.75

Q4-18 - 353.50 / 356.00

Q1-19 - 345.25 / 347.75

CAL19 - 311.75 / 315.25

CAL20 - 238.50 / 245.00

Singapore 180 cSt

Mar18 - 368.75 / 370.75

Apr18 - 368.50 / 370.50

May18 - 368.25 / 370.25

Jun18 - 367.75 / 369.75

Jul18 - 366.25 / 368.25

Aug18 - 365.00 / 367.00

Q2-18 - 368.25 / 370.25

Q3-18 - 365.50 / 367.50

Q4-18 - 360.50 / 363.00

Q1-19 - 353.00 / 355.50

CAL19 - 321.00 / 324.50

CAL20 - 254.25 / 260.75

Rotterdam Barges

Mar18 349.75 / 351.75

Apr18 349.25 / 351.25

May18 348.25 / 350.25

Jun18 347.25 / 349.25

Jul18 345.50 / 347.50

Aug18 343.50 / 345.50

Q2-18 348.25 / 350.25

Q3-18 343.25 / 345.25

Q4-18 333.75 / 336.25

Q1-19 325.00 / 327.50

CAL19 288.00 / 291.50

CAL20 224.50 / 231.00