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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 30 Jan 2018 09:13 GMT

Commentary

Brent crude futures, the global benchmark, had declined 49 cents, or 0.7 percent, to $68.97 a barrel by 05:22 GMT, after earlier dropping as low as $68.91. The contract for March delivery settled down $1.06, or 1.5 percent, at $69.46 a barrel on Monday. U.S. WTI crude futures dropped 70 cents, or 1.1 percent, to $64.86 a barrel. Yesterday, they fell 58 cents, or 0.9 percent, to $65.56. U.S. output is rising like the Seine at the moment, already up around the levels of Saudi Arabia. I'm sure that is giving them a huge amount of pride after the 2014-2015 attempt by OPEC to wipe U.S. production off the map with their price war. They are now like the son who finally is standing up to his dad: "Go to your room!"... "No!". Now there are two ways this scenario ends: a readjustment to the changing relationship, or an attempt to put the younger player into their original position. OPEC, the ball is in your court. I'm not a betting man, but I think after their previous attempt, OPEC will attempt the former solution. The market is reluctantly moving southwards, with none of the factual bearish news being a killer blow; it seems to have just made people withdraw. Market spreads and cracks have been very wide in the mornings demonstrating this. I'm sure the market 'experts' have as much inkling on where this market is going as your nan.

Fuel Oil Market (January 29)

The front crack opened at -11.75, weakening to -11.80, moving back to -11.25, closing at -11.40. The Cal 19 was valued at -17.25.

Markets edge lower amid muted trade Asia's fuel oil market traded slightly lower on Monday amid limited trade activity.

Fuel oil front-month time spreads and viscosity spreads edged lower from their recent highs on Friday, while cash premiums of 380 cSt fuel oil cargoes edged lower despite sustained buying interest for physical cargoes, the sources said.

Australia-based Prostar Capital has bought the Socar Aurora Fujairah Terminal FZC located in the United Arab Emirates oil storage hub, said sources with knowledge of the matter.

Economic Data and Events

* 3pm: U.S. Conf. Board Consumer Confidence, Jan.

* 9:30pm: API issues weekly U.S. oil inventory report

* Today, no exact timing;

** Bloomberg-compiled refinery snapshot, looking at key outages at refineries in the U.S. and Canada, providing offline capacity projections for crude units and FCCs

** Chatham House Middle East & North Africa Energy conference, final day

** Forties, Ekofisk and other North Sea loading programs for March

** BHGE annual meeting, final day

** Energy Mexico conference, Mexico City, with Pemex CEO and nation's Secretary of Energy attending, among others, 1st day of 3

** U.S. President Donald Trump delivers State of the Union address

Singapore 380 cSt

Feb18 - 378.50 / 380.50

Mar18 - 378.25 / 380.25

Apr18 - 378.00 / 380.00

May18 - 377.50 / 379.50

Jun18 - 376.75 / 378.75

Jul18 - 375.25 / 377.25

Q2-18 - 377.50 / 379.50

Q3-18 - 373.50 / 375.50

Q4-18 - 367.50 / 370.00

Q1-19 - 357.75 / 360.25

CAL19 - 310.25 / 313.25

CAL20 - 241.75 / 246.75

Singapore 180 cSt

Feb18 - 384.00 / 386.00

Mar18 - 383.75 / 385.75

Apr18 - 384.00 / 386.00

May18 - 383.75 / 385.75

Jun18 - 383.00 / 385.00

Jul18 - 381.50 / 383.50

Q2-18 - 383.50 / 385.50

Q3-18 - 379.75 / 381.75

Q4-18 - 374.00 / 376.50

Q1-19 - 364.75 / 367.25

CAL19 - 318.25 / 321.25

CAL20 - 252.25 / 257.25

Rotterdam Barges

Feb18 363.75 / 365.75

Mar18 365.25 / 367.25

Apr18 365.00 / 367.00

May18 364.25 / 366.25

Jun18 363.25 / 365.25

Jul18 361.50 / 363.50

Q2-18 364.00 / 366.00

Q3-18 359.00 / 361.00

Q4-18 348.75 / 351.25

Q1-19 338.50 / 341.00

CAL19 289.25 / 292.25

CAL20 213.25 / 218.25



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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