Oil commentary - 2 September 2019

Morning all. Brent closed Friday at $59.25 down 1.24 and WTi closed down 1.61 to settle at $55.10. I know I might sound like an old man but is it really September already? As 2019 enters Autumn, the sun is setting on a part of the oil barrel that has been with us since you bought your morning newspaper from the cheeky little scamp with dirty cheeks and scruffy hair and shouting "EXTRA EXTRA!" on the side of the road. Yes, the end is coming for High Sulphur fuel oil. I mean you'd probably have to live under a bridge and only surface once a year not to realise about the pending sulphur change, that's how much people have been talking about it and when I say the end, it won’t actually be the end, there will still be some HSFO. But it’s quite right that this change is so well documented, it is a shift we see only once in a generation, if that and things are going to change, whether the market is ready for them or not. Much more will be written here about the shift to 0.5% LSFO but over the course of the next few weeks expect some drama in the fuel oil market. Or more drama I should say. What else is going on? US-China trade talks are really starting to bite across global markets and this weekend saw more tariffs being applied. Of course, this has had an adverse effect on crude price, even with as category 5 hurricane on the USAC. The market seems like it is losing patience with the lack of progress on the trade talks and quite rightly so, we haven't seen any evidence of talks even starting proper, let alone there be an agreement. I expect the market to teapot a lot more as there doesn't seem much chance of things moving on any time soon. OPEC compliance was 136% in August, pretty good that. But production was actually up in August thanks to increased flows from Iraq and Nigeria. I wonder how much longer other members of OPEC+ will sit idly by and watch not only the US, but other members of the cartel gain market share. Good day and week to all.