|
| Oil and fuel oil hedging market update |
| By the Oil Desk at Freight Investor Services.
|
|
|
| Freight Investor Services (FIS) logo. Image credit: Freight Investor Services (FIS) |
|
Updated on 16 Jan 2018 09:23 GMT
|
Commentary
Brent hit $70.37 a barrel on Monday, a December 2014 high - when markets were at the beginning of a three year-long slump. U.S. WTI crude futures were at $64.47 a barrel, up $17 cents, or 0.3 percent from their last settlement, after WTI hit a December-2014 peak of $64.89 a barrel in early trading. Well, who'd have thunk it; look at the headlines this morning: 'Oil prices up at 3 year highs, as market supported by healthy demand'. Well, yeeeessss, in any historical look at demand it looks pretty healthy. It's like my food intake across the day; it looks a pretty healthy amount, around the levels of the last few years, BUT, and that is a big butt, exercise needs to be taken into account. What's the point in just focusing on demand and not supply. Not to worry, the very accurate projections from banks are here to back it up. Merrill Lynch: 'We now see a deficit of 430,000 bpd in 2018 compared to 100,000 prior'; Morgan Stanley: 'oil markets were 0.5 million bpd undersupplied in 2017'. Well, l'm sure you can talk up the numbers to show anything. It's like modern art: "What do you see?" "I see the artist's attempt to illicit the feeling of sorrow and the bottom corner makes me see into the tormented soul of the artist, really understanding their feelings when creating this piece". NO, I see randomly arranged colours on a canvas. The banks are like a used car salesman: they have a vested interest in it going up, up to the hilt they are. So of course they aren't going to talk it down. "Well, it's an okay car, not really worth the money, once you get to about 40 mph, it drags to the left, which is pretty dangerous, actually." Technically, we are due a corrective phase, so don't be too surprised if we get a drop back in prices, before a renewal of the bullish sentiment.
Fuel Oil Market (January 15)
The front crack opened at -11.15, weakening to -11.55 across the day. The Cal 19 was valued at -11.90.
Cash premiums for Asia's 380 cSt high-sulphur fuel oil cargoes climbed to their highest since Jan. 3 amid elevated deal value on Monday, trade sources said.
In the break bulk ex-wharf market, stiff competition weighed on 380 cSt fuel oil ex-wharf premiums as suppliers sought to attract buyers ahead of the lull period during the Chinese new year holidays next month, source said.
ST Shipping, Glencore's shipping arm, has chartered the Almi Sun suezmax tanker to load up to 130,000 tonnes of fuel oil from the Middle East Gulf around Jan. 18 for discharge into Asia, according to ship broker reports and ship tracking data in Reuters Eikon.
Economic Data and Events
* EIA releases monthly Drilling Productivity Report
* Sandefjord oil conference, with speakers including Statoil CEO Eldar Saetre and Norway Petroleum and Energy Minister Terje Soviknes, 1st day of 2
* China National Petroleum Corp. releases annual oil and gas report
* Argus Americas Crude Summit, Houston, with executives from Trafigura, Reliance Industries, Motiva Enterprises, among others, 1st day of 3
* Angola, Nigerian loading programs for March
Singapore 380 cSt
Feb18 - 378.00 / 380.00
Mar18 - 378.50 / 380.50
Apr18 - 378.75 / 380.75
May18 - 378.75 / 380.75
Jun18 - 378.25 / 380.25
Jul18 - 377.75 / 379.75
Q2-18 - 378.50 / 380.50
Q3-18 - 376.75 / 378.75
Q4-18 - 372.75 / 375.25
Q1-19 - 365.00 / 367.50
CAL19 - 346.50 / 349.50
CAL20 - 292.00 / 297.00
Singapore 180 cSt
Feb18 - 382.50 / 384.50
Mar18 - 383.50 / 385.50
Apr18 - 383.75 / 385.75
May18 - 384.00 / 386.00
Jun18 - 383.50 / 385.50
Jul18 - 383.25 / 385.25
Q2-18 - 383.75 / 385.75
Q3-18 - 382.25 / 384.25
Q4-18 - 378.75 / 381.25
Q1-19 - 372.75 / 375.25
CAL19 - 355.00 / 358.00
CAL20 - 301.00 / 306.00
Rotterdam Barges
Feb18 365.75 / 367.75
Mar18 366.75 / 368.75
Apr18 367.25 / 369.25
May18 367.00 / 369.00
Jun18 366.50 / 368.50
Jul18 365.25 / 367.25
Q2-18 366.75 / 368.75
Q3-18 363.25 / 365.25
Q4-18 355.00 / 357.50
Q1-19 347.00 / 349.50
CAL19 326.00 / 329.00
CAL20 272.00 / 277.00 |
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. |
|
|
