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Commentary

Brent closed last night at $65.42 up 0.17, WTI closed at $61.68. I said a couple of weeks ago that the correction we have witnessed in Feb on flat price would not last and we would hover around a support level on Brent whilst everyone dusts off their IP hangovers and decides what they actually want to do this year. $65 is that level. The irony about US oil production and the Trump administration is that we never really saw a fixed energy agenda when he started in office. They never really told everyone what they would do in advance; they have merely gone about their business quietly, and it's proving rather effective. Just look at the US coal market, and, of course, US crude production. I quote Dan Brouillette, US deputy energy secretary, who told IP Week that the US was in the middle of "a historic energy revolution". OPEC's response? Dismissive of US oil production growth, of course. US production increases have outweighed OPEC production cuts; the question now is will the trend continue or will oil production depletion, growing demand, and changing oil movements take the edge off the rise, and allow the final stocks to be drained? We could then slightly move over into an oil shortage. OPEC members are currently earning hundreds of millions more on their oil than they were with Brent at $45. I don't see them throwing their toys out the pram on such numbers.

Fuel Oil Market (February 21)

Cracks slip to near two-week low -10.20. Asia's front-month high-sulphur fuel oil crack widened its discount to Brent crude on Wednesday, slipping to a near two-week low as ample nearterm supplies weighed on market sentiment. The March 180 cSt fuel oil crack to Brent was trading at about minus $7.30 a barrel, its widest discount since Feb. 8. This came despite weaker oil prices on Wednesday, which were weighed down by a rebound in the U.S. dollar from three-year lows hit last week and by an expected rise in U.S. crude production. Total fuel oil flows into East Asia for February are expected to close steady-to-higher at about 6.33 million tonnes, lifted by heavier Western arbitrage arrivals and intra-Asian inflows that held steady at higher levels for a sixth straight month. This compares with the 2017 average of 6.35 million tonnes, the assessments.

Economic Data and Events

* 8am: Singapore onshore oil-product stockpile data

* 4pm: EIA issues weekly U.S. oil inventory report, delayed by one day due to U.S. holiday

* IP week, final day, today including U.A.E., Egyptian oil ministers

* Nigeria Petroleum Summit in Abuja, 4th day of 5

* Russian refining maintenance schedule from ministry

Singapore 380 cSt

Mar18 - 358.50 / 360.50

Apr18 - 358.25 / 360.25

May18 - 357.75 / 359.75

Jun18 - 357.25 / 359.25

Jul18 - 356.00 / 358.00

Aug18 - 354.75 / 356.75

Q2-18 - 357.75 / 359.75

Q3-18 - 354.75 / 356.75

Q4-18 - 349.50 / 352.00

Q1-19 - 341.25 / 343.75

CAL19 - 310.50 / 314.00

CAL20 - 231.25 / 237.75

Singapore 180 cSt

Mar18 - 365.25 / 367.25

Apr18 - 364.75 / 366.75

May18 - 364.25 / 366.25

Jun18 - 364.00 / 366.00

Jul18 - 362.75 / 364.75

Aug18 - 361.50 / 363.50

Q2-18 - 364.25 / 366.25

Q3-18 - 361.50 / 363.50

Q4-18 - 356.50 / 359.00

Q1-19 - 349.00 / 351.50

CAL19 - 319.75 / 323.25

CAL20 - 247.00 / 253.50

Rotterdam Barges

Mar18 345.75 / 347.75

Apr18 345.50 / 347.50

May18 344.75 / 346.75

Jun18 344.00 / 346.00

Jul18 342.25 / 344.25

Aug18 340.25 / 342.25

Q2-18 344.75 / 346.75

Q3-18 339.75 / 341.75

Q4-18 330.75 / 333.25

Q1-19 322.25 / 324.75

CAL19 286.75 / 290.25

CAL20 217.25 / 223.75