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Commentary

Brent futures fell 37 cents, or nearly 0.5 percent, to $79.20 a barrel by 06:36 GMT, after climbing 35 cents yesterday. U.S. WTI crude futures eased 21 cents, or nearly 0.3 percent, to $71.99 a barrel, having climbed on Tuesday to $72.83, also the highest since November 2014. UBS has said that prices being where they are right now are detrimental for demand growth. It doesn't take a neurosurgeon to work out that if the price of something goes up and wages don't go up by the same extent then people may struggle to afford to fill their tanks up. Just take what the highly intelligent George Salmon said yesterday "Filling up the tank is a pretty essential expense for most of us, so the average consumer could find there's a few pounds less in the jar at the end of each month." Thanks George, I wish I got paid his salary for such insightful comments. I know there are lots of you out there that are watching crude trying with all its might to break up to the $85 level, but, like it or not, crude is coughing and spluttering like an asthmatic dolphin. It will be interesting to see which way we go from here. We have stats today, and they will apparently show us a draw on everything except gasoline inventories, which is interesting seeing as we are coming into driving season. A lot of data due to out today, with FOMC minutes and UK CPI, so keep you eye on cable. It's only a matter before the oilmighty dollar starts to react with the USD again. Good day.

Fuel Oil Market (May 22)

The front crack opened at -10.80, weakening to -11.30 across the day, closing -11.25. The Cal 19 was valued at -17.10

Expectations of narrow arbitrage supplies in June helped firm Asia's fuel oil market with the 380 cSt fuel oil front-month time spread and cash differentials of the fuel edging higher. Western arbitrage flows into Singapore in June are estimated at about 4 million tonnes, compared to an estimated 5 million tonnes in March, trade sources said.

Firm seasonal demand for fuel oil in power generation also capped Middle Eastern arbitrage flows into Singapore at about 1 million tonnes in June, down from nearly 2 million tonnes imported since the start of the year, the source said. Despite the tighter supply outlook, however, the front-month arbitrage time spread remained unchanged from the previous session where it had reached a more-than one week low.

Economic Data and Events: (Times are London.)

* 12pm: MBA Mortgage Applications, May 18

* 2:45pm: U.S. Markit Manufacturing PMI, May (prelim)

* 3:30pm: EIA weekly oil inventory report

* 7pm: Fed's FOMC Meeting Minutes

* Genscape weekly ARA crude stockpiles report

Singapore 380 cSt

Jun18 - 445.75 / 447.75

Jul18 - 443.00 / 445.00

Aug18 - 439.50 / 441.50

Sep18 - 436.00 / 438.00

Oct18 - 432.25 / 434.25

Nov18 - 428.75 / 430.75

Q3-18 - 439.50 / 441.50

Q4-18 - 428.50 / 430.50

Q1-19 - 416.25 / 418.75

Q2-19 - 402.25 / 404.75

CAL19 - 380.50 / 383.50

CAL20 - 308.00 / 313.00

Singapore 180 cSt

Jun18 - 455.00 / 457.00

Jul18 - 452.50 / 454.50

Aug18 - 449.25 / 451.25

Sep18 - 446.00 / 448.00

Oct18 - 442.75 / 444.75

Nov18 - 439.50 / 441.50

Q3-18 - 449.25 / 451.25

Q4-18 - 439.25 / 441.25

Q1-19 - 427.50 / 430.00

Q2-19 - 414.00 / 416.50

CAL19 - 395.25 / 398.25

CAL20 - 322.25 / 327.25

Rotterdam Barges

Jun18 - 431.50 / 433.50

Jul18 - 428.50 / 430.50

Aug18 - 425.00 / 427.00

Sep18 - 420.75 / 422.75

Oct18 - 416.25 / 418.25

Nov18 - 411.50 / 413.50

Q3-18 - 424.75 / 426.75

Q4-18 - 411.50 / 413.50

Q1-19 - 398.75 / 401.25

Q2-19 - 384.00 / 386.50

CAL19 - 359.50 / 362.50

CAL20 - 294.00 / 299.00