Image credit: Freight Investor Services (FIS)

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Commentary

Oil prices are lower at the minute amid rising supply from OPEC and the United States, outweighing concerns that falling Iranian output will tighten markets once U.S. sanctions bite from November. Brent futures were at $77.43 per barrel at 02:22 GMT, down 21 cents, or 0.3 percent, from their last close. WTI crude futures were at $69.62 per barrel, down 18 cents, or 0.3 percent, from their last settlement. Output from OPEC rose by 220,000 bpd between July and August, to a 2018-high of 32.79 million bpd, a Reuters survey found. Output was boosted by a recovery in Libyan production and as Iraq's southern exports hit a record. Meanwhile, U.S. drillers added oil rigs for the first time in three weeks, energy services firm Baker Hughes reported on Friday, increasing the rig count by 2 units to 862. The high rig count has helped lift U.S. crude oil production by more than 30 percent since mid-2016, to 11 million bpd. Despite the price dip, the market still seems bullish for Brent, supported by the notion that U.S. sanctions on Iranian crude oil exports will eventually lead to constricted markets. Iranian production is already showing signs of decline, falling by 150,000 bpd. Many have warned that an economic slowdown because of trade disputes between the US and other major economies including China and the European Union would drag on oil demand. Worryingly, manufacturing activity in China grew at the slowest pace in more than a year in August, with export orders shrinking for a fifth month and employers cutting more staff, a private survey showed on Monday.

Fuel Oil Market (Aug 31)

The front crack opened at -10.45, weakening to -10.65 across the day. The Cal 19 was valued at -14.95.

The front-month 380 cSt barge crack edged lower on Friday, increasing its discount to Brent crude to its widest in three months.

Expectations of higher arbitrage inflows and easing supply constraints in the Singapore trading and storage hub have weighed on market sentiment over the past weeks.

The September 380 cSt barge crack to Brent crude slipped to about $10.69 a barrel, down from minus $10.48 a barrel on Thursday and its widest discount since May 31.

- Weekly fuel oil stocks in the Amsterdam-RotterdamAntwerp (ARA) oil and storage hub fell 7 percent, or 78,000 tonnes, to a near four-month low of 1.028 million tonnes in the week ended Aug 30, data from Dutch consultancy PJK International showed.

Economic data/events (Times are London.)

* U.S., Canada Labor Day public holidays

* World Heavy Oil Congress and Exhibition, Sept. 3-5 in Muscat, Oman. Speakers include oil ministers from Oman and Bahrain, executives from Eni, Total, KOC, Baker Hughes, Schlumberger, Saudi Aramco

* Abu Dhabi International Downstream Summit, Sept. 3-5 in U.A.E., including speakers from Adnoc Refining, Saudi Aramco, SATORP, Cepsa

* Bloomberg tanker-tracking stories on August crude exports from various nations to be published from Monday

* Bloomberg to publish survey on OPEC August crude production either Monday or Tuesday

Singapore 380 cSt

Oct18 - 440.75 / 442.75

Nov18 - 436.75 / 438.75

Dec18 - 433.75 / 435.75

Jan19 - 429.75 / 431.75

Feb19 - 426.75 / 428.75

Mar19 - 423.50 / 425.50

Q1-19 - 426.75 / 428.75

Q2-19 - 417.50 / 419.50

Q3-19 - 401.00 / 403.50

Q4-19 - 363.50 / 366.00

CAL19 - 402.75 / 405.75

CAL20 - 337.75 / 343.75

Singapore 180 cSt

Oct18 - 448.25 / 450.25

Nov18 - 445.50 / 447.50

Dec18 - 443.00 / 445.00

Jan19 - 440.00 / 442.00

Feb19 - 437.25 / 439.25

Mar19 - 434.25 / 436.25

Q1-19 - 437.25 / 439.25

Q2-19 - 429.75 / 431.75

Q3-19 - 417.00 / 419.50

Q4-19 - 385.00 / 387.50

CAL19 - 417.75 / 420.75

CAL20 - 360.75 / 366.75

Rotterdam 3.5%

Oct18 - 420.25 / 422.25

Nov18 - 416.25 / 418.25

Dec18 - 412.50 / 414.50

Jan19 - 410.00 / 412.00

Feb19 - 407.50 / 409.50

Mar19 - 404.75 / 406.75

Q1-19 - 407.50 / 409.50

Q2-19 - 398.50 / 400.50

Q3-19 - 378.75 / 381.25

Q4-19 - 339.25 / 341.75

CAL19 - 381.75 / 384.75

CAL20 - 323.00 / 329.00