Image credit: Freight Investor Services (FIS)

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Commentary

Brent crude oil futures were at $75.69 per barrel at 06:54 GMT, down 26 cents, or 0.3 percent, from their last close and U.S. WTI crude futures were down 12 cents, or 0.2 percent, at $68.41 a barrel. The two words of the day are Iran and India. Iran sanctions are taking their toll on the sentiment of the market, as we pushed above the $70-75 range. Yes, Sinopec is alleviating some of the concerns about global trade and is still buying oil from both Iran and the U.S., but if the U.S. stands firm by its sanctions, it will take a significant amount out of the supply side. India, on the other hand, is the consumer of the moment. It is estimated that it will overtake China by 2024, guzzling down an increase of 3.5 billion barrels per day from 2017 to 2035 - think of a scene like Zoolander at the petrol station. We have come off the highs of fuel oil price that we saw at the height of yesterday, but it still seems that prices are well supported.

Fuel Oil Market (Aug 28)

The front crack opened at -10.45, weakening to -10.75, before strengthening to -10.70, closing -10.60. The Cal 19 was valued at -14.75.

Expectations of higher supply in the Singapore fuel oil hub continued to weigh on market sentiment, pulling the 380 cSt front-month time spread and cash premium lower for a straight second session on Tuesday.

The front-month 380 cSt fuel oil time spread was at a near two-month low of $5 a tonne on Tuesday, down from $5.50 a tonne in the previous session.

The 380 cSt fuel oil cash premium also slipped to a near two-month low of $4.97 a tonne to Singapore quotes, down from $5.65 per tonne on Monday.

China's independent refiners have ramped up their foreign oil buying after returning from prolonged summer maintenance to gear up for rising winter fuel demand, a sign that the financial pain from taxes and higher crude prices have ebbed for now.

Economic data/events (Times are London.)

* 3:30pm: EIA weekly U.S. oil inventory report

* Genscape weekly ARA crude stockpiles report

* ONS conference, Stavanger, 3rd day of 4

Singapore 380 cSt

Sep18 - 438.50 / 440.50

Oct18 - 433.50 / 435.50

Nov18 - 430.00 / 432.00

Dec18 - 427.00 / 429.00

Jan19 - 424.00 / 426.00

Feb19 - 421.00 / 423.00

Q4-18 - 430.25 / 432.25

Q1-19 - 421.25 / 423.25

Q2-19 - 412.00 / 414.50

Q3-19 - 397.00 / 399.50

CAL19 - 398.75 / 401.75

CAL20 - 333.25 / 339.25

Singapore 180 cSt

Sep18 - 446.00 / 448.00

Oct18 - 442.25 / 444.25

Nov18 - 439.25 / 441.25

Dec18 - 436.25 / 438.25

Jan19 - 434.25 / 436.25

Feb19 - 431.75 / 433.75

Q4-18 - 439.25 / 441.25

Q1-19 - 432.00 / 434.00

Q2-19 - 424.75 / 427.25

Q3-19 - 412.25 / 414.75

CAL19 - 413.50 / 416.50

CAL20 - 356.50 / 362.50

Rotterdam 3.5%

Sep18 - 418.50 / 420.50

Oct18 - 413.50 / 415.50

Nov18 - 409.50 / 411.50

Dec18 - 406.00 / 408.00

Jan19 - 403.75 / 405.75

Feb19 - 401.50 / 403.50

Q4-18 - 409.75 / 411.75

Q1-19 - 401.75 / 403.75

Q2-19 - 393.00 / 395.50

Q3-19 - 374.50 / 377.00

CAL19 - 375.50 / 378.50

CAL20 - 316.75 / 322.75