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Commentary

Brent closed Friday up $0.49 to $73.07 and Sep WTI closed at $68.26. I'm not sure what it is about this oil market, but it likes to be stuck in a range. I suppose we all need comfort blankets when we are felling poorly, but Brent so far this year has been gapping either up or down quite dramatically and then staying within a 5 buck range. From May to Jul, we were in $75-$80 territory; now it looks like we are set for $70- $75 range for a while. What will break us out of it though? I think I know the answer, and that comes from our favourite golf-playing, brushed-back-hair President. The trade war spat and sanctions crusade could, quite frankly, cripple his whole administration, and leave his support base alienated. There are certain things that everyone in life has a real bugbear about but can do absolutely nothing about - not anything of positive influence, anyway. My bugbear is when some stands too close to me in a queue ("step back space invader!"), or people slurping their tea. As much as Trump perhaps has a point with regards to tariffs, he should just let it go, or perhaps curb the late night Friday drunk tweeting. If it carries on, then the global economy and everything else with it could be in for a pretty grim second half of the year. In terms of his sanctions, the people who are going to be hit hardest are his gasoline-guzzling, Rust Belt supporters, I guess this is why he is giving OPEC such a hard time - to get him out of a difficult corner by lowering oil prices. Good day and week to all.

Fuel Oil Market (Jul 20)

The front crack opened at -7.60, weakening to -8.00, before strengthening to -7.55, closing -7.75. The Cal 19 was valued at -15.15

380 cSt high-sulphur fuel oil extended gains, with cash premiums, time spreads and cracks climbing to fresh multiyear highs, amid a persistent shortage of finished grade fuel oil in the Singapore trading hub.

Strong buying interest also pushed 380 cSt cash premiums to $7.68 per tonne to Singapore quotes on Friday, their highest in a little over three years. Similarly, the August 380 cSt barge crack discount to Brent crude was as narrow as $7.75 a barrel on Friday before retreating to minus $8.10 a barrel, broker sources said.

Strong seasonal demand for fuel oil particularly from power producers in the Middle East, along with falling inventories across key storage hubs, have tightened arbitrage flows of the fuel into Singapore over the past three months.

Economic data/events (Times are London.)

* 1:30pm: Chicago Fed Nat Activity Index for June

* 3pm: U.S. existing home sales for June

* Bloomberg forecast of U.S. waterborne LPG exports

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

Singapore 380 cSt

Aug18 - 440.00 / 442.00

Sep18 - 430.75 / 432.75

Oct18 - 425.25 / 427.25

Nov18 - 422.00 / 424.00

Dec18 - 418.75 / 420.75

Jan19 - 415.25 / 417.25

Q4-18 - 422.00 / 424.00

Q1-19 - 412.25 / 414.25

Q2-19 - 402.00 / 404.50

Q3-19 - 381.00 / 383.50

CAL19 - 375.50 / 378.50

CAL20 - 302.00 / 308.00

Singapore 180 cSt

Aug18 - 448.00 / 450.00

Sep18 - 439.75 / 441.75

Oct18 - 435.50 / 437.50

Nov18 - 432.50 / 434.50

Dec18 - 429.25 / 431.25

Jan19 - 426.00 / 428.00

Q4-18 - 432.50 / 434.50

Q1-19 - 423.25 / 425.25

Q2-19 - 414.50 / 417.00

Q3-19 - 397.25 / 399.75

CAL19 - 390.75 / 393.75

CAL20 - 325.25 / 331.25

Rotterdam 3.5%

Aug18 - 415.75 / 417.75

Sep18 - 409.50 / 411.50

Oct18 - 405.00 / 407.00

Nov18 - 401.00 / 403.00

Dec18 - 397.50 / 399.50

Jan19 - 395.00 / 397.00

Q4-18 - 401.00 / 403.00

Q1-19 - 392.25 / 394.25

Q2-19 - 381.50 / 384.00

Q3-19 - 356.25 / 358.75

CAL19 - 353.75 / 356.75

CAL20 - 289.50 / 295.50