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| Oil and fuel oil hedging market update |
| By the Oil Desk at Freight Investor Services.
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| Freight Investor Services (FIS) logo. Image credit: Freight Investor Services (FIS) |
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Updated on 21 Nov 2017 09:01 GMT
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Commentary
Brent crude futures, the international benchmark for oil prices, were at $62.20 per barrel at 03:01 GMT, $8 cents above their last close, and U.S. WTI crude futures were at $56.50 a barrel, also up $8 cent from their last settlement. Come on people, the market is boring enough without trotting out the same headlines over and over again. 'Oil prices steady as rising U.S. output undermines OPEC cuts', 'Market waits for OPEC meeting'. Some interesting points not being talked about in these stories, oil hipster time. U.S. rig count remained unchanged. It wasn't long ago that people were losing their minds over the increasing rig count; why has this not gone to the moon with the increasing crude price? We've hardly had any movement since breaking through the $60 level. This is an important point to dwell on, especially with the news that ConocoPhillips is looking to invest all its new project money in shale oil. The implications of the IMO 2020 regulations are going to start to impact the market, and I bet if you are a tanker owner you are wringing your hands as there is going to be a lot of refined product that needs to be transported to ports to cater for the new demand. Goodie for you. WTI is looking like the younger brother of Brent who has now grown up and is far bigger and better. Its problems of investment for capacity increases and readjusting trade routes will have a profound effect on the market. Yes OPEC cut, yes inventories, blah blah, we get it and know it. But if you want to stay ahead of the curve, there's plenty of other things we could be taking about.
Fuel Oil Market (November 20)
The front crack opened at -7.95, weakening to -8.00, before strengthening to -7.90, ending -8.00. The Cal 18 was valued at -7.85.
The second-month EW arbitrage spread of 380 narrowed to a near two-month low as arrivals into Singapore through December are expected to improve.
Recently, weaker fuel oil prices in northwest Europe due to rising Russian fuel oil exports after the conclusion of the refinery maintenance season there, as well as relatively weaker tanker charter rates, have encouraged some suppliers to lock in fresh supplies into Singapore
Total fuel oil flows into East Asia for November were poised to close at nine-month high of around 7 million tonnes, boosted by recovering Western arrivals, near record-high inflows from the Middle East and 11-month high intra-Asia volumes.
Economic Data/Events: (UK times)
* 1:30pm: Chicago Fed Nat Activity Index, Oct.
* 3pm: U.S. Existing Home Sales, Oct.
* 9:30pm: API issues weekly U.S. oil inventory report
Singapore 380 cSt
Dec17 - 361.25 / 363.25
Jan18 - 360.00 / 362.00
Feb18 - 358.75 / 360.75
Mar18 - 357.50 / 359.50
Apr18 - 356.00 / 358.00
May18 - 354.25 / 356.25
Q1-18 - 358.75 / 360.75
Q2-18 - 354.75 / 356.75
Q3-18 - 349.50 / 352.00
Q4-18 - 344.50 / 347.00
CAL18 - 352.25 / 355.25
CAL19 - 317.75 / 322.75
Singapore 180 cSt
Dec17 - 365.25 / 367.25
Jan18 - 364.25 / 366.25
Feb18 - 363.50 / 365.50
Mar18 - 362.75 / 364.75
Apr18 - 361.75 / 363.75
May18 - 361.00 / 363.00
Q1-18 - 363.50 / 365.50
Q2-18 - 361.00 / 363.00
Q3-18 - 356.00 / 358.50
Q4-18 - 351.00 / 353.50
CAL18 - 358.50 / 361.50
CAL19 - 326.50 / 331.50
Rotterdam 380 cSt
Dec17 341.75 / 343.75
Jan18 341.75 / 343.75
Feb18 341.50 / 343.50
Mar18 341.00 / 343.00
Apr18 340.00 / 342.00
May18 339.00 / 341.00
Q1-18 341.50 / 343.50
Q2-18 339.50 / 341.50
Q3-18 334.50 / 337.00
Q4-18 326.00 / 328.50
CAL18 335.25 / 338.25
CAL19 296.75 / 301.75 |
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. |
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