Image credit: Freight Investor Services (FIS)

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Commentary

Oil prices rose this morning, extending bigger gains from the previous day amid expected OPEC-led supply cuts and a mandated reduction in Canadian output. Both crude benchmarks climbed by around 2% from the previous session after Washington and Beijing agreed a truce in their trade disputes and said they would negotiate for 90 days before taking any further action. Oil prices look likely to move up gradually this week as investors anticipate supply cuts by OPEC. The Middle East-dominated OPEC will on Dec. 6 meet at its headquarters in Vienna, Austria, to agree a joint output policy. OPEC will also discuss policy with non-OPEC production giant Russia. "We expect OPEC to follow suit and agree to a production cut in Vienna this coming Thursday," U.S. bank Goldman Sachs said in a note to clients. "A cut in OPEC and Russia production of 1.3 million barrels per day (bpd) will be required to reverse the ongoing counter-seasonally large increase in inventories," the bank said.

Fuel Oil Market (Dec 3)

The front crack opened at -5.90, strengthening to -5.35, before weakening to -5.85, closing -5.70. The Cal 19 was valued at -11.00.

Buying interest for physical cargoes of 380 HSFO intensified on Monday, boosting cash premiums of the fuel to a twoweek high.

This came just as expectations of easing supply constraints last week helped ease bullish sentiment that has dominated the market for about a month, dragging 380 cSt cash premiums to a 1-1/2 month low on Friday

The 380 cSt fuel oil cash premium jumped to $8.97 a tonne to Singapore quotes on Monday, up from $5.79 a tonne on Friday and its widest premium since Nov. 20. FO380-SIN-DIF

Offers for ex-wharf 380 cSt fuel oil were at about $7-8 a tonne above Singapore cargo quotes, but these failed to attract any buyers despite having traded at premiums of $15- $20 per tonne in the second half of November.

Economic Events:

* 9:30pm: API issues weekly U.S. oil inventory report

* Bloomberg-compiled Refinery Snapshot for U.S. and Canada; gives offline capacity projections for crude units and FCCs

Singapore 380 cSt

Jan19 - 393.50 / 395.50

Feb19 - 387.00 / 389.00

Mar19 - 381.50 / 383.50

Apr19 - 376.00 / 378.00

May19 - 370.50 / 372.50

Jun19 - 364.50 / 366.50

Q1-19 - 387.25 / 389.25

Q2-19 - 370.75 / 372.75

Q3-19 - 351.50 / 354.00

Q4-19 - 324.50 / 327.00

CAL19 - 359.25 / 362.25

CAL20 - 303.75 / 309.75

Singapore 180 cSt

Jan19 - 397.50 / 399.50

Feb19 - 391.75 / 393.75

Mar19 - 387.50 / 389.50

Apr19 - 382.50 / 384.50

May19 - 377.75 / 379.75

Jun19 - 372.25 / 374.25

Q1-19 - 392.25 / 394.25

Q2-19 - 378.25 / 380.25

Q3-19 - 361.25 / 363.75

Q4-19 - 340.00 / 342.50

CAL19 - 368.75 / 371.75

CAL20 - 324.75 / 330.75

Rotterdam 3.5%

Jan19 - 361.75 / 363.75

Feb19 - 357.00 / 359.00

Mar19 - 352.50 / 354.50

Apr19 - 348.00 / 350.00

May19 - 344.00 / 346.00

Jun19 - 339.50 / 341.50

Q1-19 - 357.00 / 359.00

Q2-19 - 343.50 / 345.50

Q3-19 - 325.00 / 327.50

Q4-19 - 295.25 / 297.75

CAL19 - 331.00 / 334.00

CAL20 - 279.75 / 285.75

0.1% Rott barges Gasoil

Jan19 - 75.67 / 75.87

Feb19 - 76.14 / 76.34

Mar19 - 76.58 / 76.78

Apr19 - 76.88 / 77.08

May19 - 77.04 / 77.24

Jun19 - 77.20 / 77.40

Q1-19 - 76.44 / 76.84

Q2-19 - 77.27 / 77.67

Q3-19 - 77.99 / 78.29

Q4-19 - 78.51 / 78.91

CAL19 - 77.44 / 78.04

CAL20 - 78.90 / 79.50

Sing GO 10ppm

Jan19 - 568.32 / 570.32

Feb19 - 568.00 / 570.00

Mar19 - 567.33 / 569.33

Apr19 - 567.29 / 569.29

May19 - 568.79 / 570.79

Jun19 - 569.90 / 571.90

Q1-19 - 567.88 / 569.88

Q2-19 - 568.74 / 570.74

Q3-19 - 575.29 / 577.79

Q4-19 - 576.09 / 579.09

CAL19 - 571.25 / 575.25

CAL20 - 578.74 / 584.74