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Commentary

Brent closed up $1.29 last night to $64.69 and WTI closed at $57.99, up $0.63. So the outside factor nobody was planning on has come to light up Christmas, and it comes in the form of the Forties pipeline being shut down. The whole Brent structure, let alone flat price, has roofed. It's not going to take much for the bulls to jump on any piece of news with regards to supply stalling, but yesterday's reports of a crack in the pipeline is fairly significant. Once the welders do their job though, let's see if the market comes back to the levels we were trading at before this particular sorry episode. The US producers will be happy because at least this news of the Brent system has taken some of the spotlight away from them, but I am surprised that the WTI/Brent has widened. I would have thought that the US producers would be quick to snap up any grumblings of force majeure being declared on deliveries of North Sea oil and look at taking that buzzword of the moment - 'market share' - by the scruff of Santa's big red suit. I'm sure news of this will out in the next few days, though, but let's see. Do API have any Christmas surprises in store? Well, let's see, but once again all eyes should be on anticipated US production levels.

Fuel Oil Market (December 11)

The front crack opened at -9.55, strengthening to -9.25, before weakening to -9.35. The Cal 18 was valued at -8.50.

Asia's January 180 cSt fuel oil crack narrowed its discount to Brent crude on Monday, snapping six straight sessions of losses.

The front-month fuel oil crack on Friday reached an eightmonth low on signs of weaker demand and rising inventories of the fuel across key storage hubs.

Royal Dutch Shell said a fire at its Singapore refinerypetrochemical site was extinguished on Sunday and no one was hurt in the incident.

India's fuel oil demand was unchanged in November compared with the same month last year. India's domestic sales of fuel oil in November totalled 570,000 tonnes, unchanged from October as well.

Economic Data/Events: (UK times)

* 11am: U.S. NFIB Small Business Optimism, Nov.

* 1:30pm: U.S. PPI Final Demand, Nov.

* ~5pm: EIA releases monthly Short-Term Energy Outlook, or STEO

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

* Bloomberg-compiled refinery snapshot, looking at key outages at refineries in the U.S. and Canada, and providing offline capacity projections for crude units and FCCs

Singapore 380 cSt

Jan18 - 365.50 / 367.50

Feb18 - 365.50 / 367.50

Mar18 - 365.75 / 367.75

Apr18 - 365.25 / 367.25

May18 - 364.50 / 366.50

Jun18 - 364.00 / 366.00

Q1-18 - 365.75 / 367.75

Q2-18 - 365.50 / 367.50

Q3-18 - 362.25 / 364.75

Q4-18 - 357.50 / 360.00

CAL18 - 360.75 / 363.75

CAL19 - 328.75 / 333.75

Singapore 180 cSt

Jan18 - 370.00 / 372.00

Feb18 - 370.25 / 372.25

Mar18 - 370.75 / 372.75

Apr18 - 370.75 / 372.75

May18 - 370.25 / 372.25

Jun18 - 369.75 / 371.75

Q1-18 - 370.50 / 372.50

Q2-18 - 371.25 / 373.25

Q3-18 - 368.50 / 371.00

Q4-18 - 364.00 / 366.50

CAL18 - 366.50 / 369.50

CAL19 - 337.50 / 342.50

Rotterdam 380 cSt

Jan18 350.25 / 352.25

Feb18 351.25 / 353.25

Mar18 352.00 / 354.00

Apr18 351.75 / 353.75

May18 351.25 / 353.25

Jun18 350.50 / 352.50

Q1-18 351.25 / 353.25

Q2-18 351.25 / 353.25

Q3-18 346.75 / 349.25

Q4-18 338.50 / 341.00

CAL18 345.50 / 348.50

CAL19 308.50 / 313.50