Image credit: Freight Investor Services (FIS)

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Commentary

Brent crude futures for January had dropped 37 cents, or 0.49 percent, to $74.67 per barrel by 05:27 GMT, and WTI crude futures declined 29 cents to $65.02 a barrel. So, someone in Australia in the print media is predicting a 50:50 chance that due to sanctions in Iran there will be a huge shock to oil markets and, boom, up we will fly to $120 at the start of next year. Seems like a bit of an overreaction - a bit like those people in your friends group who always describe things as the best or worst things in the world. Calm down, love, it's just one of the many dogs you have seen walking down the high street; it's not the cutest thing you have ever seen in the world. High prices have consequences. Apart from hitting all end users' wallets, there is also an impact on economies, with oil-rich nations lining their pockets, and other - especially developing - nations, really suffering. For fuel oil in the East, we have seen a strengthening of the EW over the last few days, as stocks of fuel oil drop to six-week lows after low imports have pushed up margins for the remaining stocks. I'm sure OPEC are acutely aware of not pushing parts of the world economy into recession because of high oil prices, because in the end everyone loses. So if the situation continues, do expect there to be some more leeway given - in terms of pricing and supply - to alleviate some of the problems. We have already seen this signalled with Saudi Arabia saying that it is going to reduce premiums for December light crude oils from the Gulf to Asia. Perhaps this is a sign of things to come. It had better be, or the 50:50 prediction may look pretty conservative. Good day.

Fuel Oil Market (Oct 31)

The front crack opened at -6.70, strengthening to -6.00, before weakening to -6.10, closing -5.90. The Cal 19 was valued at -13.20.

Concerns of tight near-term supplies continued to boost the fuel oil market with 380 cSt fuel oil cash and ex-wharf premiums climbing higher. Strong buying interest and higher deal values lifted cash premiums for 380 cSt fuel oil cargoes to their highest since June 2015 at $9.66 a tonne above to Singapore quotes on Wednesday.

Singapore 380 cSt ex-wharf premiums also strengthened this week amid shortages of finished grade bunker fuels for prompt delivery due to low volumes of arbitrage arrivals in October, trade sources said.

Fuel oil inventories in Fujairah fell 16 percent higher, or 1.345 million barrels (about 201,000 tonnes), to a five-week low of 7.028 million barrels (1.049 million tonnes) in the week ended Oct. 29, data from S&P Global Platts showed.

Economic Events: (Times are UK)

* 11:30am : U.S. Challenger Job Cuts, Oct.

* 12:30pm: U.S. Nonfarm Productivity, 3Q

* 12:30pm: U.S. Unit Labor Costs

* 12:30pm: U.S. Initial Jobless Claims, Oct. 27

* 12:30pm: U.S. Continuing Claims, Oct. 20

* 1:45pm: Bloomberg Consumer Comfort, Oct. 28

* 1:45pm: U.S. Markit Manufacturing PMI, Oct. (final)

* 2pm: U.S. Construction Spending, Sept.

* Bloomberg OPEC survey on production for October

* Bloomberg monthly tanker tracking compilations, including for exporters such as Saudi Arabia and Iran, published throughout the day

* Singapore International Energy Week, final day of presentations

* Singapore onshore oil-product stockpile data

* Russian refining maintenance schedule from ministry

Singapore 380 cSt

Dec18 - 462.75 / 464.75

Jan19 - 453.75 / 455.75

Feb19 - 446.25 / 448.25

Mar19 - 440.25 / 442.25

Apr19 - 434.50 / 436.50

May19 - 428.50 / 430.50

Q1-19 - 446.75 / 448.75

Q2-19 - 429.25 / 431.25

Q3-19 - 407.75 / 410.25

Q4-19 - 374.25 / 376.75

CAL19 - 413.50 / 416.50

CAL20 - 345.50 / 351.50

Singapore 180 cSt

Dec18 - 469.75 / 471.75

Jan19 - 462.50 / 464.50

Feb19 - 455.50 / 457.50

Mar19 - 450.00 / 452.00

Apr19 - 445.00 / 447.00

May19 - 439.00 / 441.00

Q1-19 - 456.00 / 458.00

Q2-19 - 440.00 / 442.00

Q3-19 - 420.75 / 423.25

Q4-19 - 393.75 / 396.25

CAL19 - 426.50 / 429.50

CAL20 - 367.50 / 373.50

Rotterdam 3.5%

Dec18 - 427.00 / 429.00

Jan19 - 420.25 / 422.25

Feb19 - 415.00 / 417.00

Mar19 - 410.25 / 412.25

Apr19 - 405.75 / 407.75

May19 - 401.00 / 403.00

Q1-19 - 415.00 / 417.00

Q2-19 - 400.75 / 402.75

Q3-19 - 379.50 / 382.00

Q4-19 - 344.50 / 347.00

CAL19 - 385.50 / 388.50

CAL20 - 324.00 / 330.00