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Commentary

Brent closed Friday up $0.88 to $75.33 and WTI closed at $71.01 up $0.68. Brent seems to be happy to flirt around this $75 number, as it has done for quite a while now, but this week could give us a reason to break us out of this $7 handle, I think. I'd love to be a fly on the wall when Trump and Putin meet later. Both translators will probably look at each other after each response and say: "Did he really say that?" The oil market will be keeping a close eye on any talk of increasing oil production, however. Both the US and Russia have clearly said that they are ready to increase production as and when necessary. Last week signified quite the milestone for the US oil industry; oil product imports were at a three-decade low and crude oil exports were at 3mb/d - the highest figure ever. In 2005, US weekly net imports peaked, routinely topping 13 mb/d. Now that figure has plunged to less than 2 mb/d. I'm not saying that the US still isn't heavily reliant on imports; the grades of crude the AC and GC refineries run are not really suited to the light bbl the US produce, but with each passing week, the US is becoming more and more intrinsically part of the global oil trading network. Even if the meeting doesn't bring out of it an agreement on production increase, then each will be so sour about things that "war" will be the only other option. Hello $100 oil. Good day and week to all.

Fuel Oil Market (Jul 13)

The front crack opened at -8.75, strengthening to -8.25, before weakening to -8.45. The Cal 19 was valued at -15.30.

Asia's fuel oil market firmed with the August 380 cSt fuel oil crack and front-month time spread being bid higher on Friday, trade sources said. Shrinking fuel oil inventories across key global storage hubs, lower output and firm seasonal demand for power generation have helped boost sentiment in the fuel oil market and restrict arbitrage flows into Singapore and Asia.

Singapore marine fuel sales dropped 8.4 percent in June from a month ago to 3.922 million tonnes, data from the Maritime and Port Authority of Singapore (MPA) showed on Friday.

Weekly fuel oil stocks in the ARA oil and storage hub dropped 20 percent, or 302,000 tonnes, to a five-week low of 1.206 million tonnes in the week ended July 5.

Economic data/events (Times are London.)

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

* 1:30pm: U.S. Retail Sales, June

* 1:30pm: U.S. Empire Manufacturing, July

* 3pm: U.S. Business Inventories, May

* Bloomberg proprietary forecast of Cushing crude inventory change plus weekly analyst survey of crude, gasoline, distillates inventories before Wednesday’s EIA report

* U.S. President Donald Trump and Russian President Vladimir Putin hold their first summit, Helsinki

* EIA’s Monthly Drilling Productivity Report

Singapore 380 cSt

Aug18 - 442.75 / 444.75

Sep18 - 435.75 / 437.75

Oct18 - 430.75 / 432.75

Nov18 - 427.25 / 429.25

Dec18 - 424.25 / 426.25

Jan19 - 421.25 / 423.25

Q4-18 - 427.50 / 429.50

Q1-19 - 418.25 / 420.25

Q2-19 - 408.00 / 410.50

Q3-19 - 381.25 / 383.75

CAL19 - 384.25 / 387.25

CAL20 - 305.75 / 311.75

Singapore 180 cSt

Aug18 - 451.25 / 453.25

Sep18 - 444.75 / 446.75

Oct18 - 440.75 / 442.75

Nov18 - 437.25 / 439.25

Dec18 - 434.25 / 436.25

Jan19 - 432.25 / 434.25

Q4-18 - 437.50 / 439.50

Q1-19 - 429.50 / 431.50

Q2-19 - 420.25 / 422.75

Q3-19 - 397.25 / 399.75

CAL19 - 399.50 / 402.50

CAL20 - 329.00 / 335.00

Rotterdam 3.5%

Aug18 - 422.25 / 424.25

Sep18 - 417.00 / 419.00

Oct18 - 412.75 / 414.75

Nov18 - 409.00 / 411.00

Dec18 - 405.25 / 407.25

Jan19 - 403.00 / 405.00

Q4-18 - 409.00 / 411.00

Q1-19 - 400.25 / 402.25

Q2-19 - 389.00 / 391.50

Q3-19 - 361.50 / 364.00

CAL19 - 362.50 / 365.50

CAL20 - 294.00 / 300.00