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Commentary

Brent closed up $0.54 on Friday to $64.37, WTI closed at $61.25 up $0.26. Brent seems to be following a similar pattern to last year in terms of trading in a relatively narrow range. Last year, we were really around the $55 mark and flirted between $50 and $60 for about five months. Then the market realized there was still too much oil and demand wasn't there, and we traded in the $40s for a couple of months before the superheroes that are OPEC rescued the producers and we went back up to $60. This year, the pivot point seems to be $65. What is confusing is why during those two months of last year the market actually said "Hang on a minute, hold your horses, what's going on? There's loads of oil!" Oil producers have got their fingers crossed that there are going to still be the big oil consumers needing oil over the rest of this year. Oil depletion, strategic storage, growing world economy, should be enough to keep their heads above water. An interesting factor that may push up prices again is Trump's tariff's. This could increase costs for shale producers that have worked so hard to keep these down. It's true that the policies will help domestic steel production for example, but those consuming the steel may need to pay a pretty penny for it. Goodbye increasing rig count, goodbye cheap maintenance, goodbye easy upgrades.

Fuel Oil Market (March 3)

The front crack opened at -10.25, strengthening to -10.10, before weakening to -10.30. The Cal 19 was valued at -15.00.

Asia's front-month viscosity spread climbed 25 cents back to $7.75 a tonne, the eight-month high achieved earlier this week.

The front-month viscosity spread is the price differential between 180 cSt and 380 cSt fuel oil and reflects how strong or weak the fuel oil market is

Fuel oil stocks held independently at the ARA refining and storage hub fell by more than 23 percent to reach an 8-1/2 month low of 775,000 tonnes in the week to March 1, Dutch consultancy PJK International said. The drop in stock levels were due to rising exports to Singapore

Economic Data and Events

* 1:30pm: Bloomberg forecast of U.S. waterborne LPG exports

* 2:45pm: Markit U.S. Services PMI Feb. Final, est. 55.9, prior 55.9

* 3pm: U.S. ISM Non-Manufacturing Composite Feb., est. 59.0, prior 59.9

Singapore 380 cSt

Apr18 - 355.75 / 357.75

May18 - 355.00 / 357.00

Jun18 - 354.25 / 356.25

Jul18 - 353.00 / 355.00

Aug18 - 351.50 / 353.50

Sep 18 - 350.00 / 352.00

Q2-18 - 355.00 / 357.00

Q3-18 - 352.00 / 354.00

Q4-18 - 346.25 / 348.75

Q1-19 - 338.75 / 341.25

CAL19 - 308.00 / 312.00

CAL20 - 230.25 / 238.25

Singapore 180 cSt

Apr18 - 363.00 / 365.00

May18 - 362.25 / 364.25

Jun18 - 361.50 / 363.50

Jul18 - 360.50 / 362.50

Aug18 - 359.00 / 361.00

Sep 18 - 357.50 / 359.50

Q2-18 - 362.25 / 364.25

Q3-18 - 359.50 / 361.50

Q4-18 - 353.75 / 356.25

Q1-19 - 346.50 / 349.00

CAL19 - 317.25 / 321.25

CAL20 - 253.25 / 261.25

Rotterdam Barges

Apr18 342.75 / 344.75

May18 342.00 / 344.00

Jun18 341.25 / 343.25

Jul18 339.75 / 341.75

Aug18 337.75 / 339.75

Sep 18 - 335.25 / 337.25

Q2-18 342.00 / 344.00

Q3-18 337.50 / 339.50

Q4-18 328.50 / 331.00

Q1-19 321.25 / 323.75

CAL19 286.25 / 290.25

CAL20 226.25 / 234.25