---

Commentary

Brent crude futures fell 32 cents, or 0.5 percent, to $71.52 a barrel by 06:38 GMT to the lowest since April 17. They fell 4.6 percent on Monday and U.S. WTI futures were down 31 cents, or 0.5 percent, at $67.75 a barrel. They declined 4.2 percent on Monday. Well there's cliff edge falls and then there's the continued tumbling down a steep hill that the Brent market has experienced this past week. The only thing that has dropped quicker in price is that shipment of England 'It's Coming Home' T-shirts. Worst. Investment. Decision. Ever. Normally the inverse relationship with the fuel oil crack mitigates such large movements in Brent, but yesterday it didn’t move more than 10c all day. Many factors have been building up which caused the correction we've seen - from just below $80 to under $72 this morning. Supply concerns in Libya and Norway have subsided, as the minor blips resolved themselves. Other supplies have increased, with both Russia and Saudi Arabia informing the world of their plans to increase production along with U.S. emergency stockpiles. The volume that has been trading would indicate that many of the financials and hedge funds pulled out their longs, and are now awaiting their next chance to enter the market. The question now presented is whether this $70-75 range is the new banding, or does Brent have further to move before it settles again. Good day.

Fuel Oil Market (Jul 16)

The front crack opened at -8.35, before weakening to -8.40. The Cal 19 was valued at -15.35.

Strong buying interest on Monday lifted Asia's 380 cSt fuel oil cash premium to a more-than-three-year high just as expectations of ongoing supply constraints continued to feed bullish sentiment, trade sources said.

A lack of fuel oil arbitrage shipments into Asia since the start of the summer months have led to narrower availability of finished grade bunker fuels in Singapore and are expected to last through August, the sources said

The shortage of finished grade bunker fuels in Singapore, coupled with steady demand for bunker fuels, have also helped boost ex-wharf premiums of the mainstay 380 cSt fuel oil to $6-$8 per tonne to Singapore quotes over the past week, up from $2-$3 per tonne at the start of June, trade sources said.

Economic data/events (Times are London.)

* 3pm: U.S. NAHB Housing Market Index, July

* 9:30pm: API issues weekly U.S. oil inventory report

* Bloomberg-compiled Refinery Snapshot for U.S. and Canada; gives offline capacity projections for crude units and FCCs

* Duke Energy CEO, Murray Coal’s Bob Murray, FERC Chairman Kevin McIntyre all speaking at Politico’s ProSummit that runs from 8:30am to 4:30pm in Washington

Singapore 380 cSt

Aug18 - 424.75 / 426.75

Sep18 - 417.75 / 419.75

Oct18 - 413.00 / 415.00

Nov18 - 409.50 / 411.50

Dec18 - 406.50 / 408.50

Jan19 - 403.50 / 405.50

Q4-18 - 409.75 / 411.75

Q1-19 - 400.50 / 402.50

Q2-19 - 390.25 / 392.75

Q3-19 - 363.50 / 366.00

CAL19 - 369.25 / 372.25

CAL20 - 295.75 / 301.75

Singapore 180 cSt

Aug18 - 433.25 / 435.25

Sep18 - 426.75 / 428.75

Oct18 - 423.00 / 425.00

Nov18 - 419.50 / 421.50

Dec18 - 416.50 / 418.50

Jan19 - 414.50 / 416.50

Q4-18 - 419.50 / 421.50

Q1-19 - 411.50 / 413.50

Q2-19 - 402.25 / 404.75

Q3-19 - 379.25 / 381.75

CAL19 - 384.50 / 387.50

CAL20 - 319.00 / 325.00

Rotterdam 3.5%

Aug18 - 404.00 / 406.00

Sep18 - 398.50 / 400.50

Oct18 - 394.25 / 396.25

Nov18 - 390.25 / 392.25

Dec18 - 386.75 / 388.75

Jan19 - 384.50 / 386.50

Q4-18 - 390.50 / 392.50

Q1-19 - 381.50 / 383.50

Q2-19 - 370.50 / 373.00

Q3-19 - 343.50 / 346.00

CAL19 - 347.25 / 350.25

CAL20 - 280.75 / 286.75