---

Commentary

Brent closed Friday at $74.64, down $0.10, and WTI closed at $68.10, down $0.09. June Brent expires today and the front month is quite heavily backwardated, so tomorrow we will see Brent still hovering near the $75 per bbl mark. What will cause it to break to the upside though? I said on Friday that if the US were to reimpose sanctions on Iran, fundamentally the market would not see a drop in production, and most of this is thanks to the US exporting around 2.3mn bpd, up some 1.5mn bpd since when the sanctions were dropped a couple of years ago; but the market doesn't care about the fundamentals and hasn't for quite some time, so I don't foresee 2018 being the summer of discontent. I mentioned a couple of years ago that owning oil in a market similar to the one we are in now is a bit like buying a baby pet elephant. It's very cute and your mates come round and feed it peanuts etc, but eventually that baby elephant will grow in to a massive jumbo and you'll be left trying to tame a five-tonne beast in your back garden who is going to squash everything and cause you to lose your house. Now, I don't think the gravity of owning crude in this market is quite as dramatic as the pet elephant scenario but I think it's a matter of time before figures regarding demand throw a massive spanner in the works for the bulls. It's all about driving season. So, drivers, start your engines!!

Fuel Oil Market (April 27)

The front crack opened at -13.00, weakening to -13.20, before strengthening to -12.95. The Cal 19 was valued at -16.65.

The Singapore fuel oil market rallied this week as inventories dropped at the same time that some supplies in the region failed to meet the standards for use as shipping fuel, further reducing the amount of supply available. Cash premiums of the mainstay fuel oil climbed $2.80 a tonne to Singapore quotes, their highest since May 2017 and up from a $1.40 a tonne premium a week ago.

Buyers seeking break-bulk ex-wharf fuel oil parcels for prompt deliveries also struggled to find suppliers despite bidding for ex-wharf cargoes of the 380-cst fuel at premiums around $10 per tonne to Singapore quotes. Weekly fuel oil stocks in the ARA oil and storage hub edged up by 34,000 tonnes to an 18-week high of 1.169 million tonnes in the week ended April 26

Economic Data and Events: (Times are London.)

* China, Japan, Russia, India on holiday

** Golden Week starts in Japan with holidays Monday, Thursday, Friday

* Primorsk diesel loading program for May

* Norwegian crude loading programs for June begin to emerge

* Libyan OSPs for May

* U.S. EIA releases Petroleum Supply Monthly

** 914 Oil and Natural Gas Production report

** All other reports

* Nigerian President Muhammadu Buhari visits President Donald Trump at the White House

Singapore 380 cSt

May18 - 399.00 / 401.00

Jun18 - 396.00 / 398.00

Jul18 - 393.00 / 395.00

Aug18 - 390.00 / 392.00

Sep18 - 387.00 / 389.00

Oct18 - 384.00 / 386.00

Q3-18 - 390.00 / 392.00

Q4-18 - 381.25 / 383.25

Q1-19 - 370.75 / 373.25

Q2-19 - 360.25 / 362.75

CAL19 - 335.25 / 338.25

CAL20 - 269.75 / 274.75

Singapore 180 cSt

May18 - 410.25 / 412.25

Jun18 - 407.00 / 409.00

Jul18 - 404.00 / 406.00

Aug18 - 401.00 / 403.00

Sep18 - 398.00 / 400.00

Oct18 - 395.00 / 397.00

Q3-18 - 401.00 / 403.00

Q4-18 - 392.25 / 394.25

Q1-19 - 382.00 / 384.50

Q2-19 - 371.75 / 374.25

CAL19 - 349.75 / 352.75

CAL20 - 293.75 / 298.75

Rotterdam Barges

May18 - 383.75 / 385.75

Jun18 - 382.25 / 384.25

Jul18 - 379.50 / 381.50

Aug18 - 376.25 / 378.25

Sep18 - 372.25 / 374.25

Oct18 - 368.00 / 370.00

Q3-18 - 376.00 / 378.00

Q4-18 - 364.00 / 366.00

Q1-19 - 354.00 / 356.50

Q2-19 - 341.50 / 344.00

CAL19 - 315.25 / 318.25

CAL20 - 244.25 / 249.25