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Commentary

Spot Brent crude oil futures were at $73.42 per barrel at 0653 GMT, up 21 cents, or 0.3 percent, from their last close and U.S. WTI crude futures CLc1 were up 19 cents, or 0.3 percent, at $68.68 barrel. I was reading an interesting thing this morning about something that hadn't occurred to me - shale oil company hedging. The U.S. shale companies, you would think, should be absolutely jubilant at the current state of the market. High prices, supposed shortfalls of Venezuela and Iran to flood with American oil; however, one thing is dimming their smiles - their hedges. These companies hedged in at lower levels in case OPEC tried to flush them out with a production war again - a very sensible plan. This has, however, left the industry posting a little lower-than-expected profits. In other news, it looks like bulls are taking control of the news again as Saudi Arabia’s output falls and the number of U.S. oil rigs continues to stall. It will be of no surprise to see that we are towards the top of our new range of $70-75. Negotiating price and what levels work is always a tricky business, especially when you involve the public. A poll just came out about the price of a pint in the U.K. and over half of the respondents said that a pint is too expensive... well yes of course they did. Question: "Do you want a cheaper pint?" Answer: "Yes". Captain obvious wins the day again. "Was your divorce too expensive?" "Definitely", "Is my child an overly expensive drag on my disposable income?" "Most likely", "Has the government taken the right amount of tax?" "Almost definitely not". We may not like the costs around us, but they are what they are. I think we need to update an age old saying: There is nothing certain in life apart from death and taxes and that things are always too expensive. Good day.

Fuel Oil Market (Aug 3)

The crack market eased a touch to -8.35 amid thin volume - Cash premiums for cargoes of Asia's 380 cSt fuel oil extended losses on Friday amid weaker deal values in the Singapore trading window. Despite the lower deal values, however, some trade sources said there were few signs of easy supply constraints over the near term as availabilities of finished grade fuel oil are expected to remain constricted through August and into September. The 380 cSt fuel oil cash premium slipped to $6.25 a tonne to Singapore quotes on Friday, down from $6.80 per tonne in the previous session and $7.50 per tonne at the start of the week.

Economic data/events (Times are London.)

* First phase of the restoration of U.S. economic sanctions on Iran are scheduled to take effect. President Trump also seeks a tougher stance on Iran from European allies

* 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

Sep18 - 436.25 / 438.25

Oct18 - 430.75 / 432.75

Nov18 - 427.00 / 429.00

Dec18 - 423.75 / 425.75

Jan19 - 420.75 / 422.75

Feb19 - 417.50 / 419.50

Q4-18 - 427.25 / 429.25

Q1-19 - 417.50 / 419.50

Q2-19 - 408.00 / 410.50

Q3-19 - 388.25 / 390.75

CAL19 - 392.00 / 395.00

CAL20 - 321.50 / 327.50

Singapore 180 cSt

Sep18 - 445.00 / 447.00

Oct18 - 440.50 / 442.50

Nov18 - 437.25 / 439.25

Dec18 - 434.25 / 436.25

Jan19 - 430.75 / 432.75

Feb19 - 428.25 / 430.25

Q4-18 - 437.50 / 439.50

Q1-19 - 428.50 / 430.50

Q2-19 - 420.25 / 422.75

Q3-19 - 404.25 / 406.75

CAL19 - 407.00 / 410.00

CAL20 - 341.50 / 347.50

Rotterdam 3.5%

Sep18 - 414.75 / 416.75

Oct18 - 410.00 / 412.00

Nov18 - 406.25 / 408.25

Dec18 - 403.00 / 405.00

Jan19 - 401.00 / 403.00

Feb19 - 398.75 / 400.75

Q4-18 - 406.25 / 408.25

Q1-19 - 397.50 / 399.50

Q2-19 - 388.00 / 390.50

Q3-19 - 365.00 / 367.50

CAL19 - 370.00 / 373.00

CAL20 - 303.50 / 309.50