---

Commentary

Brent closed down $62.21 down $0.95 and WTI closed at $55.70, down $1.06. Well how about that! I think we've made clear that the stratospheric move upwards was on shaky foundations. The market had been bid up by funds who jumped on the back of, at best, "hopeful news" that demand was going to pick up and that stocks were rebalancing. Trying to find anyone else who was really focusing on those foundations was rarer than trying to find a Tapanuli Orangutan. IEA seemed to be the final catalyst yesterday and the market decided that perhaps it can no longer be an ostrich and people have started to cash out some of their long positions. I mean, why wait all year to actually tell people what's REALLY going on? Demand hasn't really been growing, gasoline demand in the US is down, China have been buying crude for the SPR but really, that's about it. If anything, demand for oil products isn't that great this year. The question will be not where flat price will end up, but what happens with the refining margins. They are proving more stubborn than Donald Trump is about letting us know what covfefe really means. Actually, while we're at it, I'm going to have a crack at what covfefe means for the oil market. It's an acronym for Can't Oil Vessels Fuel Efficiently For Ever? Maybe Trump actually works for the IMO and it's a subliminal message that the sulphur cap in 2020 won't actually happen? Spooky...who knows......In other news API data last night showed a huge crude build. Read into that what you will but it was inevitable that the stocks finding seasonal levels again in the aftermath of an horrific US hurricane season was going to bite the market in the ass at some point.

Fuel Oil Market (November 14)

The front crack opened at -7.80, weakening to -7.95 across the day. The Cal 18 was valued at -7.90.

The front-month fuel oil crack and time spread for the mainstay 380 cSt fuel oil slipped on Tuesday despite weaker crude oil prices amid limited trade activity. Meanwhile, the front-month 180 cSt time spread flipped back into backwardation. The 180-cst time spread flipped into contango for the first time since Sept. 12, as ample supplies of the fuel weighed

Fuel oil refining margins in Singapore in October closed 30% higher than the same time a year ago, despite rising crude prices and may remain elevated as OPEC is expected to continue propping up the oil price by withholding supplies of fuel oil rich grades. The higher margins provides an incentive for so-called simple oil refineries, which lack the ability to upgrade fuel oil to gasoline and diesel, to maximise their output, preventing a drawdown of high inventories.

Economic Data/Events: (UK times)

* 1:30pm: Oct. U.S. CPI m/m est. 0.1% (prior 0.5%) and y/y est. 2% (prior 2.2%)

* 3:30pm: EIA weekly data report; TOPLive blog coverage begins 3:25pm

* Today: ** 5-day Russian Urals loading program for December may emerge Wednesday, Thursday or Friday

** Abu Dhabi's Adipec, 3rd day of 4, including BP Chief Economist Spencer Dale

** Saudi Oil Minister Khalid Al-Falih attends Bonn climate talks

** Genscape weekly ARA crude stockpiles report

Singapore 380 cSt

Dec17 - 358.25 / 360.25

Jan18 - 356.75 / 358.75

Feb18 - 355.25 / 357.25

Mar18 - 353.75 / 355.75

Apr18 - 352.25 / 354.25

May18 - 350.75 / 352.75

Q1-18 - 355.25 / 357.25

Q2-18 - 351.25 / 353.25

Q3-18 - 345.75 / 348.25

Q4-18 -340.50 / 343.00

CAL18 - 348.25 / 351.25

CAL19 - 310.75 / 315.75

Singapore 180 cSt

Dec17 - 362.50 / 364.50

Jan18 - 361.50 / 363.50

Feb18 - 360.50 / 362.50

Mar18 - 359.50 / 361.50

Apr18 - 358.25 / 360.25

May18 - 357.50 / 359.50

Q1-18 - 360.50 / 362.50

Q2-18 - 357.25 / 359.25

Q3-18 - 352.25 / 354.75

Q4-18 - 347.50 / 350.00

CAL18 - 354.50 / 357.50

CAL19 - 319.50 / 324.50

Rotterdam 380 cSt

Dec17 339.25 / 341.25

Jan18 338.50 / 340.50

Feb18 338.00 / 340.00

Mar18 337.25 / 339.25

Apr18 336.50 / 338.50

May18 335.50 / 337.50

Q1-18 337.75 / 339.75

Q2-18 335.00 / 337.00

Q3-18 329.50 / 332.00

Q4-18 321.00 / 323.50

CAL18 331.00 / 334.00

CAL19 289.00 / 294.00