Image credit: Freight Investor Services (FIS)

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Commentary

Brent crude was up 3 cents at $78.21 a barrel by 0634 GMT, after falling 2 percent on Thursday. The global benchmark rose on Wednesday to its highest since May 22 at $80.13, and U.S. WTI futures were up 18 cents, or 0.2 percent, at 68.76 a barrel, after dropping 2.5 percent on Thursday. Oh what a great thing foresight would have been for the U.S. shale oil producers. Cleverly and responsibly, they had previously hedged in their margin around the $55 level. But looking at levels now, they must be kicking themselves that their U.S. government has taken such decisions and excluded them from gaining from the majority of this price hike. The EIA's latest drilling productivity report said production in the Permian averaged 3.387 million bpd in August, and is set to rise to 3.42 million bpd this month. In total, the shale patch contributed 7.43 million bpd to the national total in August and will contribute 7.522 million bpd to the total in September. Technically, the indicators are showing yesterday's drop to be a pull back before we again test the highs of the year. So Sellotape your Panama hats onto your head, we are in for a bumpy ride.

Fuel Oil Market (Sep 13)

The front crack opened at -11.85, strengthening to -11.65, before strengthening to -11.75, closing -11.70. The Cal 19 was valued at -15.60.

Sentiment was steady in Asia's fuel oil market on Thursday as industry participants kept a close watch on arbitrage supplies into Singapore for October.

While higher fuel oil arbitrage flows into Singapore in September provided some relief after months of supply shortages, a narrow arbitrage window amid a backwardated market structure is expected to limit fuel oil inflows in October.

Meanwhile, onshore Singapore inventories of fuel oil dipped to a three-week low of 15.943 million barrels, or about 2.38 million tonnes, in the week ended Sept. 12 despite a more than three-fold increase of fuel oil net imports of the fuel.

Singapore's weekly onshore fuel oil inventories were down 1 percent, or 125,000 barrels, or about 19,000 tonnes in the week ended Wednesday.

Economic data/events (Times are London.)

* 6:00pm: Baker Hughes rig count

* 5-day Urals October loading program

* ICE weekly commitments of traders report for Brent, gasoil

* CFTC weekly commitments of traders report on various U.S. futures and options contracts

Singapore 380 cSt

Oct18 - 440.50 / 442.50

Nov18 - 436.50 / 438.50

Dec18 - 432.75 / 434.75

Jan19 - 429.00 / 431.00

Feb19 - 425.25 / 427.25

Mar19 - 421.75 / 423.75

Q4-18 - 436.75 / 438.75

Q1-19 - 424.75 / 426.75

Q2-19 - 414.25 / 416.75

Q3-19 - 398.50 / 401.00

CAL19 - 399.50 / 402.50

CAL20 - 334.50 / 340.50

Singapore 180 cSt

Oct18 - 447.25 / 449.25

Nov18 - 444.25 / 446.25

Dec18 - 441.25 / 443.25

Jan19 - 438.75 / 440.75

Feb19 - 435.50 / 437.50

Mar19 - 432.25 / 434.25

Q4-18 - 444.25 / 446.25

Q1-19 - 435.00 / 437.00

Q2-19 - 425.75 / 428.25

Q3-19 - 413.50 / 416.00

CAL19 - 414.00 / 417.00

CAL20 - 354.50 / 360.50

Rotterdam 3.5%

Oct18 - 419.50 / 421.50

Nov18 - 415.50 / 417.50

Dec18 - 411.75 / 413.75

Jan19 - 409.00 / 411.00

Feb19 - 406.50 / 408.50

Mar19 - 404.00 / 406.00

Q4-18 - 415.75 / 417.75

Q1-19 - 406.25 / 408.25

Q2-19 - 396.00 / 398.50

Q3-19 - 376.00 / 378.50

CAL19 - 378.00 / 381.00

CAL20 - 314.50 / 320.50