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Commentary

Brent closed last night at $79.28, up $0.85, and WTI closed up $0.19 to $71.49. One child throwing their toys out the pram (a.k.a Trump) on Iran, has caused another - Total - to have threatened to quit Iran. To those that say, or more hope, the price will come down, how do you see the impact of high fuel prices for ships for 2020 combined with Trump reelection? Brent/WTI has widened to 7.67 and with all this crude oil the US is producing it makes a barrel of the Permian's finest that much more attractive to just about everyone. I maintain what I said last week regarding why Trump reimposed sanctions on Iran - business. It is easy to extrapolate that this was a pure and simple business decision to assist the US energy sector. I see that the IEA have finally said that demand isn't coming in as forecast and they have reduced the outlook for 2018 down by 100kbpd. This is a fairly significant shift considering they, and just about everyone else, were saying how amazing demand will be this year. Don't get me wrong, it has been fairly good, but it was highly doubtful it was ever going to reach the numbers all the Brainiac's came up with. Eventually, high prices are going to hurt demand - that much is simple to work out. I wonder though if this Brent diff to WTI of over 7.50 per bbl is the doing of the US oil producers themselves. I'll leave you with this from ex-senator Mr Byron Dorgan, who was on the energy policy committee to the White House: "If the Administration does nothing, high gasoline prices will continue to increasingly burden our economy, taking millions of dollars out of the hands of families and putting it straight into the pockets of OPEC." Good day. Fuel Oil Market (May 16)

The front crack opened at -11.85, strengthening to - 11.60, weakening to -11.70, before closing at -11.30. The Cal 19 was valued at -17.95.

The June 380 cSt fuel oil crack to Brent crude was trading at a discount of about $11.65 a barrel, from about minus $12.35 a barrel in the previous session. In the physical market, strong buying interest in the Singapore trading window for 180 cSt fuel oil cargoes lifted cash premiums to a near two-week high on Wednesday.

Fuel oil prices have climbed since around the start of April on shortages of cutter stocks for blending and tight supplies of finished grade fuel oil. Fujairah fuel oil inventories fell 13 percent, or 1.154 million barrels (about 172,000 tonnes), to a six-week low of 7.865 million barrels (1.174 million tonnes) in the week to May 14, data via S&P Global Platts showed.

Economic Data and Events: (Times are London.)

* ~12pm: Russian refining maintenance schedule from ministry

* APPEA Oil & Gas Conference and Exhibition in Adelaide, final day

* Total CEO Patrick Pouyanne speaks at Center for Strategic and International Studies, Washington D.C.

* June WTI crude options expire

* Nigeria crude loading programs for July begin to emerge from this day

Singapore 380 cSt

Jun18 - 444.50 / 446.50

Jul18 - 441.50 / 443.50

Aug18 - 437.75 / 439.75

Sep18 - 434.00 / 436.00

Oct18 - 430.75 / 432.75

Nov18 - 427.00 / 429.00

Q3-18 - 437.75 / 439.75

Q4-18 - 426.75 / 428.75

Q1-19 - 414.00 / 416.50

Q2-19 - 396.75 / 399.25

CAL19 - 372.25 / 375.25

CAL20 - 306.75 / 311.75

Singapore 180 cSt

Jun18 - 456.00 / 458.00

Jul18 - 453.00 / 455.00

Aug18 - 449.25 / 451.25

Sep18 - 445.50 / 447.50

Oct18 - 442.25 / 444.25

Nov18 - 438.50 / 440.50

Q3-18 - 449.25 / 451.25

Q4-18 - 438.25 / 440.25

Q1-19 - 425.00 / 427.50

Q2-19 - 408.00 / 410.50

CAL19 - 386.75 / 389.75

CAL20 - 330.75 / 335.75

Rotterdam Barges

Jun18 - 430.50 / 432.50

Jul18 - 427.25 / 429.25

Aug18 - 423.25 / 425.25

Sep18 - 419.00 / 421.00

Oct18 - 414.50 / 416.50

Nov18 - 409.75 / 411.75

Q3-18 - 423.00 / 425.00

Q4-18 - 409.50 / 411.50

Q1-19 - 395.75 / 398.25

Q2-19 - 378.75 / 381.25

CAL19 - 350.75 / 353.75

CAL20 - 274.00 / 279.00