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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Oil and fuel oil hedging market update

21 Sep 2017 08:14 GMT

By the Oil Desk at Freight Investor Services.



By the Oil Desk at Freight Investor Services Ltd.

Brent closed last night at $56.29 up $1.15 and WTI closed up $1.21 to $50.69. Guess what? I'm going to get controversial. But first I want to explain what has happened for me to have such an opinion. EIA data last night showed crude builds 2m bbls higher than expected, gasoline builds were as forecast and distillates draws were more than expected. Refinery runs were up 7pct week over week and US production was back up 9.52mn bbls per day. We are also hearing that bbls from storage are being loaded over the globe and that those barrels have been there so long they were starting to turn back into dinosaurs. So the controversy? I see this as a false dawn and let me explain why. The market so far this year has proven incredibly reactive to any sustained flat price rally. Perhaps this is a kick up the backside for crude traders not in the US market considering how reactive shale oil is to flat price increases; but once the market sees at least one week of gains, traders look to sell everything as quickly as they can, pricing around load port b/l to take advantage of both higher front month flat price and the increasing structure of the crude market in to steeper backwardation. Case in point - freight. Yesterday, we witnessed a fairly substantial shift in TD8 (for those not familiar, TD8 is the route for dirty Aframax vessels from Kuwait to Singapore). The TD8 market has been flat more or less the whole year, but seasonally we usually see higher numbers coming in to Q4. This only transpired yesterday. I think it is clear that such a spike on this particular freight route, and nothing moving further down the curve, i.e. Q1, that this evidences the market is taking advantage of a better front structure and only worrying about what happens in 2018 after everyone is full of turkey and eggnog. Q1 I see the return of the glut and these storage tanks being filled up as quickly as possible.

Economic Data/Events: (UK times)

* 9am: Singapore onshore oil-product stockpile data

* ~12pm: Russia refining maintenance schedule from ministry

* 1:30pm: U.S.

** Initial jobless claims for week ended Sept. 16

** Continuing claims, Sept. 9

** Philadelphia Fed business outlook survey for Sept.

* 2pm: Russia gold and forex reserve for week ended Sept. 15

* 3pm: Eurozone consumer confidence for Sept.

* 3pm: U.S. leading index for Aug.

* No exact timing

** S&P Global Platts European Refining Summit, Brussels, with executives from BofA Merrill Lynch, Maersk Oil Trading, among others, 1st day of 2

Singapore 380 cSt

Oct17 - 328.50 / 330.50

Nov17 - 325.75 / 327.75

Dec17 - 323.00 / 325.00

Jan18 - 320.50 / 322.50

Feb18 - 318.50 / 320.50

Mar18 - 317.50 / 319.50

Q4-17 - 325.75 / 327.75

Q1-18 - 319.25 / 321.25

Q2-18 - 316.00 / 318.50

Q3-18 - 313.25 / 315.75

CAL18 - 315.75 / 318.75

CAL19 - 305.25 / 310.25

CAL20 - 293.25 / 300.25

Singapore 180 cSt

Oct17 - 333.75 / 335.75

Nov17 - 331.50 / 333.50

Dec17 - 329.00 / 331.00br>
Jan18 - 326.50 / 328.50

Feb18 - 325.00 / 327.00

Mar18 - 324.25 / 326.25

Q4-17 - 331.50 / 333.50

Q1-18 - 325.75 / 327.75

Q2-18 - 322.00 / 324.50

Q3-18 - 319.75 / 322.25

CAL18 - 322.75 / 325.75

CAL19 - 314.00 / 319.00

CAL20 - 302.25 / 309.25

Rotterdam 380 cSt

Oct17 311.75 / 313.75

Nov17 307.25 / 309.25

Dec17 303.25 / 305.25

Jan18 303.00 / 305.00

Feb18 302.50 / 304.50

Mar18 302.00 / 304.00

Q4-17 307.50 / 309.50

Q1-18 303.00 / 305.00

Q2-18 301.75 / 304.25

Q3-18 300.25 / 302.75

CAL18 299.75 / 302.75

CAL19 287.50 / 292.50

CAL20 268.50 / 275.50



Founded in 2002, Freight Investor Services is a specialist in dry bulk and commodity derivatives, including cargo freight, iron ore, fertilizer and bunker fuel. The company has offices in London, Dubai, Singapore and Shanghai.

For further details about fuel oil swaps or to discuss trading opportunities, please contact Andrew Cullen, Client Relations & Development Manager, on +44 207 090 1126, or email AndrewC@freightinvestor.com.




Related Links:

Freight Investor Services Ltd.

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