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Commentary

Brent crude oil futures dropped 30 cents, or 0.4 percent, to $73.91 a barrel by 0435 GMT, adding to a 1.8 percent loss in the previous session and U.S. crude futures were down 38 cents, or 0.6 percent, at $68.38 a barrel, having dropped nearly 2 percent on yesterday. We've reached the month of August, the times of the year where the whole world is on holiday and when crude oil takes a tumble. And quite a tumble it took last night. Apart from determination, I genuinely don't see a great time ahead for the bulls. The vast majority of indicators are bearish right now, it seems. China have kindly stepped in and not only offered an olive branch to the Iranians, but a whole massive field of those olive trees that produce those massive olives that you can buy in Waitrose for about a tenner each. The trade war between China and the US rumbles on, but will anything long term be put in place? I don't think so; everyone will calm down in a few months, Iranian oil will go to China, the US will keep some symbolic tariffs and sanctions, and the world goes on turning. OPEC are enjoying producing a little more and still keeping prices pretty high. Saudi Arabia leading the move since the cartel first agreed a cut. Stats later at 3.30pm UK time. Good day.

Fuel Oil Market (Jul 30)

The front crack opened at -7.40, strengthening to -7.10, before weakening to -7.20. The Cal 19 was valued at -14.30.

Despite sluggish spot demand, Singapore 380 cSt ex-wharf premiums edged higher on Tuesday on shortages of finished grade bunker fuels for prompt delivery.

Tight availabilities of finished grade bunker fuels have contributed to a spike in cash premiums of the mainstay 380 cSt bunker fuel over the past months.

The emergence of contaminated cargoes of fuel oil which could damage a ships engines added to the shortage of supplies in Singapore while forcing some buyers to seek marine fuels in other bunkering hubs including Fujairah and Hong Kong, trade sources said. Ex-wharf premiums for the 380 cSt fuel were at about $8 per tonne to Singapore quotes on Tuesday, up from about $7 a tonne in the previous session, sources said.

Economic data/events (Times are London.)

* 12pm: MBA Mortgage Applications for July 27 (prior -0.2%)

* 1:15pm: U.S. ADP Employment Change for July, est. 186k (prior 177k)

* 2:45pm: U.S. Markit Manufacturing for July F, est. 55.5 (prior 55.5)

* 3:30pm: EIA weekly oil inventory report; TopLive blog starts 3:20pm

* 7pm: U.S. Fed Rate Decision, est. 2% (prior 2%)

* Today

** Genscape weekly ARA crude stockpiles report

** Brent loading program for September

** Bloomberg OPEC production survey for July

** Bloomberg monthly tanker tracking compilations, detailing July exports from nations such as Saudi Arabia and Iran, published throughout the day

Singapore 380 cSt

Sep18 - 440.00 / 442.00

Oct18 - 434.25 / 436.25

Nov18 - 430.25 / 432.25

Dec18 - 427.00 / 429.00

Jan19 - 423.50 / 425.50

Feb19 - 420.00 / 422.00

Q4-18 - 430.50 / 432.50

Q1-19 - 420.25 / 422.25

Q2-19 - 410.25 / 412.75

Q3-19 - 390.50 / 393.00

CAL19 - 389.25 / 392.25

CAL20 - 318.75 / 324.75

Singapore 180 cSt

Sep18 - 448.75 / 450.75

Oct18 - 444.25 / 446.25

Nov18 - 440.75 / 442.75

Dec18 - 437.75 / 439.75

Jan19 - 433.75 / 435.75

Feb19 - 431.00 / 433.00

Q4-18 - 440.75 / 442.75

Q1-19 - 431.25 / 433.25

Q2-19 - 422.50 / 425.00

Q3-19 - 406.50 / 409.00

CAL19 - 404.50 / 407.50

CAL20 - 339.00 / 345.00

Rotterdam 3.5%

Sep18 - 418.50 / 420.50

Oct18 - 413.50 / 415.50

Nov18 - 409.75 / 411.75

Dec18 - 406.25 / 408.25

Jan19 - 404.00 / 406.00

Feb19 - 401.25 / 403.25

Q4-18 - 410.00 / 412.00

Q1-19 - 401.25 / 403.25

Q2-19 - 391.00 / 393.50

Q3-19 - 367.00 / 369.50

CAL19 - 367.25 / 370.25

CAL20 - 300.75 / 306.75