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Commentary

Brent closed Friday down $0.25 to $74.29 and WTI closed at $68.69, down $0.92. It can be argued that the only by-products that bureaucracy produces are those of stupidity. However, people like things to have a bit of normality about them and their daily life and when times are thin in the oil market, stupid things can also happen. I mentioned last week that the market is looking for direction, it is teetering on the edge like the Force India Formula 1 team. I'm sure I don't need to repeat the arguments for both the bullish and bearish corners, but I am fairly confident that barring some geopolitical factor (and with Donald's access to Twitter seemingly always available, that could be at anytime) that we can expect to experience a fairly rangebound market for a while. The market has moved slightly up this morning on the news of an overhaul of car efficiency rules in the U.S. that could drive higher demand. Where's the drama? Good day and week to all.

Fuel Oil Market (Jul 27)

The front crack opened at -7.15, strengthening to -7.00, before weakening to -7.15. The Cal 19 was valued at -14.70.

The 380 cSt front-month time spread and fuel oil crack rose to fresh highs on Friday amid steady demand for the fuel and few signs of easing supply constraints after months of persistently low arbitrage supplies reduced inventories in the city-state to a more than six-year low this week. The Aug/Sept 380 cSt time spread climbed to a more than 3-1/2 year high of $9.75 a tonne on Friday, up from $8 a tonne in the previous session.

The August barge crack for 380 strengthened to minus $7 a barrel on Friday, up from minus $7.40 a barrel in the previous session, a Singapore-based oil broker said. The front month crack is at its highest since October. Weekly fuel oil stocks in the ARA oil and storage hub slipped 2 percent, or 34,000tonnes, to a two-week low of 1.328 million tonnes in the week ended July 26, data from Dutch consultancy PJK International showed.

Economic data/events (Times are London.)

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

* 3pm: U.S. Pending Home Sales for June, est. 0.2% (prior -0.5%)

* 3:30pm: Dallas Fed Manufacturing Activity for July, est. 31 (prior 36.5)

* Today:

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

** September Forties, Ekofisk and other loading programs for North Sea

** U.S. Secretary of State Michael Pompeo attends the Association of Southeast Asian Nations foreign ministers meeting, which lasts through Aug. 4 in Singapore. Iran's Foreign Affairs Minister Mohammad Javad Zarif will also attend

Singapore 380 cSt

Aug18 - 453.75 / 455.75

Sep18 - 444.50 / 446.50

Oct18 - 439.00 / 441.00

Nov18 - 435.25 / 437.25

Dec18 - 432.50 / 434.50

Jan19 - 428.75 / 430.75

Q4-18 - 435.50 / 437.50

Q1-19 - 425.25 / 427.25

Q2-19 - 415.75 / 418.25

Q3-19 - 395.50 / 398.00

CAL19 - 393.25 / 396.25

CAL20 - 322.75 / 328.75

Singapore 180 cSt

Aug18 - 460.75 / 462.75

Sep18 - 453.25 / 455.25

Oct18 - 449.00 / 451.00

Nov18 - 445.75 / 447.75

Dec18 - 443.00 / 445.00

Jan19 - 439.50 / 441.50

Q4-18 - 445.75 / 447.75

Q1-19 - 436.25 / 438.25

Q2-19 - 428.00 / 430.50

Q3-19 - 411.50 / 414.00

CAL19 - 408.50 / 411.50

CAL20 - 343.00 / 349.00

Rotterdam 3.5%

Aug18 - 430.25 / 432.25

Sep18 - 423.75 / 425.75

Oct18 - 419.00 / 421.00

Nov18 - 415.25 / 417.25

Dec18 - 411.75 / 413.75

Jan19 - 409.50 / 411.50

Q4-18 - 415.25 / 417.25

Q1-19 - 406.50 / 408.50

Q2-19 - 396.75 / 399.25

Q3-19 - 371.75 / 374.25

CAL19 - 371.50 / 374.50

CAL20 - 305.00 / 311.00