Image credit: Freight Investor Services (FIS)

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Commentary

Brent crude oil futures were trading at $86.14 per barrel at 06:51 GMT, down 15 cents, or 0.2 percent, from their last close. Brent on Wednesday hit a four-year high of $86.74 a barrel, lifted by expectations of a tightening market ahead of U.S. sanctions that will target Iran's oil exports from next month. U.S. WTI crude futures were down 18 cents, or 0.2 percent, at $76.23 a barrel. Forget all the usual generic rubbish we see in the headlines over and over. This, for me, is the most important news article of the day: "Oil traders have piled into wagers that U.S. crude oil could surge to $100 a barrel by next year, a milestone that until recently many considered unthinkable due to record U.S. production growth and relatively flat global demand." Open interest in $100 December 2018 Brent call options which expire in late October is currently more than 50,000 lots, more than any other strike price for that month, according to ICE. There are some bearish factors we need to keep in mind, like the reported private agreement between Saudi Arabia and Russia to increase production, which I'm sure will be a big feature of the November OPEC meeting as all of the nations squabble on who is allowed to pump more oil. The poor end users are really in for a rough ride. India is already struggling with the rise where fuel price rises have caused riots and the popularity of their Prime Minister Modi is starting to take a hit. Financials trading this market are really supporting this market well; the question is, when does the profit-taking 4% fall come? Good day.

Fuel Oil Market (Oct 03)

The front crack opened at -11.20, weakening to -11.50, before strengthening to -10.90, closing -10.95. The Cal 19 was valued at -15.35.

Cash premiums for 380 cSt high-sulphur fuel oil (HSFO) edged up to a near two-month high on Wednesday on firm buying interest for physical cargoes of the fuel in the Singapore trading window.

Sentiment in Asia's fuel oil market has been supported in recent weeks by expectations of relatively tight supplies over the near term amid refinery maintenance as well as looming sanctions on Iranian oil exports.

Economic data/events (Times are UK)

* 12:30pm: U.S. Challenger Job Cuts, Sept.

* 1:30pm: U.S. Initial Jobless Claims, Sept. 29

* 1:30pm: U.S. Continuing Claims, Sept. 22

* 2:45pm: Bloomberg Consumer Comfort, Sept. 30

* 3pm: U.S. Factory Orders, Aug.

* Russian refining maintenance schedule from ministry

* Singapore onshore oil-product stockpile data

* Sibcon 2018, 3rd day of 4

* Russia Energy Week, 2nd day of 4

Singapore 380 cSt

Nov18 - 501.75 / 503.75

Dec18 - 496.00 / 498.00

Jan19 - 490.25 / 492.25

Feb19 - 484.75 / 486.75

Mar19 - 479.75 / 481.75

Apr19 - 475.00 / 477.00

Q1-19 - 485.00 / 487.00

Q2-19 - 469.75 / 471.75

Q3-19 - 449.50 / 452.00

Q4-19 - 411.75 / 414.25

CAL19 - 452.50 / 455.50

CAL20 - 378.25 / 384.25

Singapore 180 cSt

Nov18 - 509.00 / 511.00

Dec18 - 504.50 / 506.50

Jan19 - 500.50 / 502.50

Feb19 - 495.50 / 497.50

Mar19 - 490.50 / 492.50

Apr19 - 486.25 / 488.25

Q1-19 - 495.50 / 497.50

Q2-19 - 481.50 / 483.50

Q3-19 - 463.75 / 466.25

Q4-19 - 432.75 / 435.25

CAL19 - 467.50 / 470.50

CAL20 - 401.50 / 407.50

Rotterdam 3.5%

Nov18 - 474.25 / 476.25

Dec18 - 469.00 / 471.00

Jan19 - 465.25 / 467.25

Feb19 - 461.75 / 463.75

Mar19 - 458.00 / 460.00

Apr19 - 454.25 / 456.25

Q1-19 - 461.50 / 463.50

Q2-19 - 448.75 / 450.75

Q3-19 - 425.50 / 428.00

Q4-19 - 385.50 / 388.00

CAL19 - 429.50 / 432.50

CAL20 - 359.50 / 365.50