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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

By the Oil Desk at Freight Investor Services.



Freight Investor Services (FIS) logo. Image credit: Freight Investor Services (FIS)


Updated on 26 Jan 2018 09:02 GMT

Commentary

Brent crude futures were at $70.40 per barrel at 07:56 GMT, down $3 cents from their last close, after dropping as low as $70.07 earlier in the day. U.S. WTI crude futures were at $65.52 a barrel, up $1 cent from their previous close, recovering from a session-low of $64.91 a barrel. Davos is in full swing and guess what news is coming out about the oil market... we are being told to forget about the US shale, stop worrying about the US disrupting the supply / demand dynamics of the OPEC cuts. So should we expect Brent to push for $80's next? It's like walking through South London on a cold, dark night, and someone says to you in passing: "Oh don't worry about the menacing-looking people hanging on the street corner, they are harmless, lovely people really." And then you are supposed to be shocked when you find multiple wounds when you get home. There I go getting mugged again... cheers Davos. It's clear to me that OPEC have tried to use reverse psychology, but that doesn't work when you're worried about something: "Don't look down" - cue you looking down. A few people have been asking about why the large move up in crude prices has not translated into much higher fuel prices. Ah, the devil is in the detail. Take a look at the crack; at the start of the week it was at -10.30 and has weakened to -11.65 this morning. This has really taken the sting out of the crude spike, so you may be sweating over $70 plus crude, but there is a saving grace.

Fuel Oil Market (January 25)

The front crack opened at -12.30, strengthening to -11.90, moving back to -12.00, closing at -11.85. The Cal 19 was valued at -15.60.

A firm Singapore fuel oil market compared with the northwest European prices helped push the front-month EW arbitrage spread to its widest premium since Dec. 21 on Thursday.

A spread in premium was recorded despite the surge in Singapore fuel oil inventories and decline in VLCC tanker rates along the Rotterdam-to-Singapore route, which were assessed at about $3 million on Thursday, down from about $3.2 million a week ago, shipbroker data showed.

Singapore fuel oil inventories jumped 11.6% to a threeweek high of 22.313 million barrels (about 3.33 million tonnes) in the week ended Jan. 24 amid fewer exports of the fuel during the week. Singapore fuel oil exports fell to 289,000 tonnes in the week to Jan. 24, down 37 percent

Economic Data and Events

* 1:30pm: U.S. Personal Consumption, 4Q A, est. 3.7%, prior 2.2%

* 1:30pm: U.S. Durable Goods Orders, Dec. P, est. 0.8%, prior 1.3%

* 6pm: Baker Hughes U.S. Oil Rigs, period Jan 26, prior 747

* 6pm: ICE commitments of traders report for Brent, gasoil

* U.S. President Donald Trump gives a keynote speech on the final day of World Economic Forum in Davos

* API issues Monthly Statistical Report

* CFTC weekly report on futures and options positions

* Myanmar Oil, Gas, Power summit in Yangon, final day

* World Economic Forum in Davos, final day; U.S. President Donald Trump gives a keynote speech

Singapore 380 cSt

Feb18 - 382.75 / 384.75

Mar18 - 382.25 / 384.25

Apr18 - 382.00 / 384.00

May18 - 381.50 / 383.50

Jun18 - 380.75 / 382.75

Jul18 - 379.50 / 381.50

Q2-18 - 381.25 / 383.25

Q3-18 - 377.00 / 379.00

Q4-18 - 370.75 / 373.25

Q1-19 - 361.50 / 364.00

CAL19 - 325.50 / 328.50

CAL20 - 258.25 / 263.25

Singapore 180 cSt

Feb18 - 388.75 / 390.75

Mar18 - 388.00 / 390.00

Apr18 - 387.75 / 389.75

May18 - 387.25 / 389.25

Jun18 - 386.50 / 388.50

Jul18 - 385.25 / 387.25

Q2-18 - 387.25 / 389.25

Q3-18 - 383.00 / 385.00

Q4-18 - 376.75 / 379.25

Q1-19 - 367.50 / 370.00

CAL19 - 333.50 / 336.50

CAL20 - 267.50 / 272.50

Rotterdam Barges

Feb18 368.50 / 370.50

Mar18 369.25 / 371.25

Apr18 369.00 / 371.00

May18 368.25 / 370.25

Jun18 367.25 / 369.25

Jul18 365.75 / 367.75

Q2-18 368.00 / 370.00

Q3-18 362.75 / 364.75

Q4-18 352.50 / 355.00

Q1-19 342.25 / 344.75

CAL19 305.00 / 308.00

CAL20 232.00 / 237.00



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.






Related Links:

Oil and fuel oil hedging market update
Freight Investor Services Ltd.

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