Image credit: Freight Investor Services (FIS)

---

Commentary

Morning, and today it all seems to be about the weather. Storm Gordon will be hitting the US and is expected to come ashore as a hurricane. As a result, the WTI is rising towards $70 with reports of oil platforms in the Gulf of Mexico being evacuated in preparation for the storm. In other news, many international shippers have stopped loading Iranian oil as U.S. financial sanctions against Tehran prevents them from insuring their cargoes. Mirroring a step by China, where buyers are shifting nearly all their Iranian oil imports to vessels owned by National Iranian Tanker Co (NITC), this means that Asia's two biggest oil importers are making plans to continue Iran purchases despite pressure by Washington to cut orders. Nothing like two global superpowers going head to head. Happy times. Reminds me a little bit of Rocky IV. Maybe we should get Trump and President Xi into the ring, pay per view event - you can see where I am going with this. Good day all.

Fuel Oil Market (Sep 03)

Asia's high sulphur fuel oil market started the month weaker today with the crack for OCT trading -11.80 as expectations of higher arbitrage inflows into Singapore in September weighed on sentiment. Fuel oil time spreads arbitrage spreads and cracks to Brent crude had all climbed to multimonth highs in July and August as inventories of the fuel shrunk as strong demand in the Middle East drew in arbitrage cargoes of the fuel away from Asia. The emergence of contaminated bunker fuels in Singapore around late-July helped further narrow the availability of finished grade marine fuels in the Singapore bunkering hub. Reflecting expectations of easing supply constraints, fuel oil suppliers accepted lower premiums for physical cargoes of the fuel in the Singapore trading window, dragging premiums to a near two-month low. The 380 cSt fuel oil cash premium slipped to $3.94 a tonne to Singapore quotes on Monday, down from $4.86 per tonne on Friday and its lowest since July 5.

Economic data/events (Times are London.)

* World Heavy Oil Congress in Muscat, Day 2 of 3

* Abu Dhabi International Downstream Summit, Day 2 of 3

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

** See OIL WEEKLY AGENDA for this week's events

Singapore 380 cSt

Oct18 - 441.25 / 443.25

Nov18 - 437.75 / 439.75

Dec18 - 434.50 / 436.50

Jan19 - 431.25 / 433.25

Feb19 - 428.00 / 430.00

Mar19 - 424.50 / 426.50

Q1-19 - 427.75 / 429.75

Q2-19 - 418.75 / 420.75

Q3-19 - 401.50 / 404.00

Q4-19 - 363.50 / 366.00

CAL19 - 404.25 / 407.25

CAL20 - 339.25 / 345.25

Singapore 180 cSt

Oct18 - 448.75 / 450.75

Nov18 - 446.50 / 448.50

Dec18 - 443.75 / 445.75

Jan19 - 441.25 / 443.25

Feb19 - 438.25 / 440.25

Mar19 - 435.25 / 437.25

Q1-19 - 438.25 / 440.25

Q2-19 - 429.75 / 431.75

Q3-19 - 417.00 / 419.50

Q4-19 - 385.00 / 387.50

CAL19 - 419.00 / 422.00

CAL20 - 362.00 / 368.00

Rotterdam 3.5%

Oct18 - 421.00 / 423.00

Nov18 - 417.00 / 419.00

Dec18 - 413.50 / 415.50

Jan19 - 411.00 / 413.00

Feb19 - 408.50 / 410.50

Mar19 - 405.75 / 407.75

Q1-19 - 408.50 / 410.50

Q2-19 - 399.50 / 401.50

Q3-19 - 380.50 / 383.00

Q4-19 - 342.00 / 344.50

CAL19 - 383.00 / 386.00

CAL20 - 324.25 / 330.25