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Commentary

Brent closed up $1.10 on Friday to $63.73 and WTI closed at $57.36 up $0.96. Well, Friday seemed a little bit of a delayed reaction by the bulls in regards to the expected OPEC announcement. Perhaps the first of the Christmas grog was having its effect but, nevertheless, rally we did. I'm still not sure the market is convinced by all this OPEC rhetoric though. We've woken up to a negative market on crude; the real test will be if we can get past that psychological $65 level. I'm not sure we will for a while and that we'll be stuck in a range between $60 and $65. Unless, of course, some geopolitical factor arises, then we may go to the magical $70. I think next year we could see a slight shift in how the market reacts to certain news. It has long been known that EIA data was and is a pivotal part of the trading week as the data released was a sign of how thirsty the US is for oil - being the world's biggest importer. Now that the US is turning into an exporter of nigh on everything apart from cheeseburgers, I think the weekly set of data the market will react primarily to will be weekly US rig data. Let's face it, it is a paradigm shift what we have witnessed from the US. They have fairly benignly shifted from net importer to net exporter and they have taken everyone, OPEC especially, by surprise. US rigs increased by two last week and I'm pretty sure that we will see somewhat of a surge in the rig count over the course of the next few weeks.

Fuel Oil Market (December 1)

The front crack opened at -8.40, weakening to -8.80, before strengthening to -8.75, closing -8.80. The Cal 18 was valued at -8.00.

Discounts of Asia's front-month 180 cSt fuel oil crack to Dubai crude narrowed to one-week high on Friday due to falling inventories in key storage hubs and on a decision taken by OPEC and Russia to extend their agreed production cuts to all of 2018.

In the physical markets, strong buying interest for 180 cSt fuel oil cargoes boosted cash premiums of the fuel. By contrast, aggressive supplier offers for 380 cSt fuel oil cargoes weighed on premiums of 380 cSt fuel oil despite active trade.

Fuel oil stocks in ARA oil hub fell for a third week straight, down 9%, or 92,000 tonnes, from the previous week to a total of 0.957 million tonnes in the week ended Nov. 30.

Economic Data/Events: (UK times)

* 3pm: U.S. Factory Orders for Oct.; est. -0.4%, prior 1.4%

* 3pm: U.S. Durable Goods Orders for Oct. F; est. -1.0%, prior -1.2%

* Today:

** Cowen Energy & Natural Resources Conference, New York, 1st day of 2

** World Oil & Gas Week, London, 1st day of 2

** Bloomberg OPEC supply estimates for November

** Any outstanding Bloomberg tanker trackers to be published

** Bloomberg forecast of U.S. waterborne LPG exports

** Bloomberg proprietary forecast of Cushing crude inventory change, plus weekly analyst survey of crude, gasoline, distillates inventories

Singapore 380 cSt

Jan18 - 362.00 / 364.00

Feb18 - 361.50 / 363.50

Mar18 - 361.00 / 363.00

Apr18 - 360.50 / 362.50

May18 - 359.50 / 361.50

Jun18 - 358.50 / 360.50

Q1-18 - 361.50 / 363.50

Q2-18 - 359.50 / 361.50

Q3-18 - 354.50 / 357.00

Q4-18 - 349.50 / 352.00

CAL18 - 355.25 / 358.25

CAL19 - 320.50 / 325.50

Singapore 180 cSt

Jan18 - 366.75 / 368.75

Feb18 - 366.50 / 368.50

Mar18 - 366.25 / 368.25

Apr18 - 366.25 / 368.25

May18 - 365.25 / 367.25

Jun18 - 364.25 / 366.25

Q1-18 - 366.50 / 368.50

Q2-18 - 365.25 / 367.25

Q3-18 - 360.75 / 363.25

Q4-18 - 355.75 / 358.25

CAL18 - 361.25 / 364.25

CAL19 - 329.25 / 334.25

Rotterdam 380 cSt

Jan18 346.00 / 348.00

Feb18 346.25 / 348.25

Mar18 346.25 / 348.25

Apr18 345.75 / 347.75

May18 344.75 / 346.75

Jun18 343.75 / 345.75

Q1-18 346.25 / 348.25

Q2-18 345.00 / 347.00

Q3-18 339.75 / 342.25

Q4-18 331.25 / 333.75

CAL18 339.25 / 342.25

CAL19 300.25 / 305.25