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Commentary

Brent closed up $1.09 on Friday to $66.21, WTI closed at $62.34, up $1.15. So, we're nearly one quarter the way through 2018 and what has the market shown us so far? It's a good question and one I think a few traders will look at pondering themselves over the course of the next two weeks. It is clear that the world economy is performing reasonably okay at the moment but there seems to be this kind of hush over all markets right now that nobody particularly wants to talk about it. Imagine this market at an Oil Anonymous meeting. Hi, my name is Crude Oil Market, and I have fundamental problems, but it's all okay. Like the classic first stage, it will start with denial. The market doesn't particularly want to actually talk about what is really going on as it could result in a significant drop in prices because, let's face it, there is an increasing sense that there is too much oil. I mentioned a few months ago that the US producers will take advantage of more advanced tools and strategies than the somewhat archaic approach OPEC producers abide by, and this has been evidenced in some data from Standard Chartered "..a survey of 73 U.S. energy companies finds that hedging increased by 22 percent in the three months ending on February 1, a sign that the shale industry continued to step up their hedges into 2018 as oil prices rallied at the start of the year. Standard Chartered puts the proportion of 2018 oil production from the surveyed companies at 63 percent". Hmm, I wonder when US production starts to plateau, which it inevitably will, who the real winners and losers will be. Oh, hey Donald.

Fuel Oil Market (March 16)

The front crack opened at -10.45, strengthening to -10.35, before weakening to -10.60. The Cal 19 was valued at -14.75.

Steady arbitrage supplies into Singapore weighed on the EW arbitrage spread this week which on Friday slipped to a oneweek low as suppliers locked in more volumes from the European oil hub for delivery into Singapore.

Fuel oil stocks in independently held storage in the ARA refining and storage hub fell by a third in the week to Thursday after strong exports to Singapore, said Dutch consultancy PJK International. Two VLCCs and a Suezmax tanker departed for Singapore, accounting for the large fall.

Japanese oil refiner Idemitsu Kosan 5019.T says it expects to restart the problem-hit 60,000 bpd resid hydro desulphurisation unit at Aichi refinery at the end of June

Economic Data and Events

* 12:30pm: Bloomberg forecast of U.S. waterborne LPG exports

* FT Commodities Global Summit in Lausanne, 1st day of 3; click here for agenda

* Papua New Guinea Petroleum & Energy Summit, Port Moresby, 1st day of 3

* Bloomberg proprietary forecast of Cushing crude inventory change plus weekly analyst survey of crude, gasoline, distillates inventories before Wednesday's EIA report

* JODI issues world oil exports, output data

* Also see OIL WEEKLY AGENDA for this week's events

Singapore 380 cSt

Apr18 - 360.75 / 362.75

May18 - 360.00 / 362.00

Jun18 - 359.00 / 361.00

Jul18 - 357.50 / 359.50

Aug18 - 355.50 / 357.50

Sep18 - 353.50 / 355.50

Q2-18 - 359.75 / 361.75

Q3-18 - 355.75 / 357.75

Q4-18 - 349.25 / 351.75

Q1-19 - 340.75 / 343.25

CAL19 - 313.00 / 317.00

CAL20 - 250.00 / 258.00

Singapore 180 cSt

Apr18 - 368.25 / 370.25

May18 - 367.50 / 369.50

Jun18 - 366.50 / 368.50

Jul18 - 365.25 / 367.25

Aug18 - 363.50 / 365.50

Sep18 - 361.50 / 363.50

Q2-18 - 367.50 / 369.50

Q3-18 - 363.50 / 365.50

Q4-18 - 357.25 / 359.75

Q1-19 - 349.25 / 351.75

CAL19 - 326.00 / 330.00

CAL20 - 273.75 / 281.75

Rotterdam Barges

Apr18 348.00 / 350.00

May18 347.50 / 349.50

Jun18 346.50 / 348.50

Jul18 344.75 / 346.75

Aug18 342.75 / 344.75

Sep18 340.00 / 342.00

Q2-18 347.25 / 349.25

Q3-18 342.25 / 344.25

Q4-18 332.75 / 335.25

Q1-19 325.00 / 327.50

CAL19 293.25 / 297.25

CAL20 238.25 / 246.25