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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 01 Feb 2018 09:46 GMT

Brent closed up 0.37 last night to $68.89, WTI closed at $64.73, up 0.23. It's always dangerous for anyone, let alone an invested broker, to make predictions on what the oil price will be for the coming year. But what the hell. So here goes - I think Brent will be in a range of $60-70 per bbl for a large part of 2018. There I've said it. Why would I say such a thing? Well I'll tell you. Try as hard as they might (and they are doing very well let's be honest), many OPEC members will decide enough's enough, I'm going to start pumping more oil because the market is up to levels that makes sense for our fiscal budget. Down goes Brent. The US are now at 10mn bpd (I told you) and the rig count is increasing with fairly alarming speed. Down goes Brent again. Final nail in t'coffin - maintenance season - this will lead to crude builds. All the while there has been the spectre of political tensions, oil sanctions on North Korea, Turkish attacks on the Kurds, continuing Yemeni war. There is also the improving world economy, which could encourage an increase in demand for oil, and further drive the bullish trends in commodities. Also, do not underestimate that people are quite happy at these levels, OPEC are making enough, good for floating Aramco, not silly expensive, refining margins good. Don't rock the boat.

Fuel Oil Market (January 30)

The front crack opened at -11.05, strengthening to -11.45, before weakening to -11.50. The Cal 19 was valued at -17.75.

Cash premiums of Asia's 380 cSt high sulphur fuel oil slipped to a more than one-week low on Wednesday, but ended the month at a similar premium to that at the start of the month.

380 cSt cash premiums were 24 cents a tonne lower on Wednesday at $1.59 a tonne to Singapore quotes. On Jan. 2 the cash premium was at $1.56 a tonne to Singapore quotes. Oil prices fell for a third day on Wednesday after data from an industry body showed U.S. crude stocks rose more than expected last week, while a selloff in other commodities, stocks and bonds added to the bearish mood. Fujairah fuel oil inventories fell for a third straight week to 6.662 million barrels (about 0.994 million tonnes) in the week to Jan. 29, their lowest since records began in January 2017.

Economic Data and Events

* 12pm: Russian refining maintenance schedule from ministry

* 12:30pm: U.S. Challenger Job Cuts, Jan.

* 1:30pm: U.S. Initial Jobless Claims, Jan. 27

* 1:30pm: U.S. Continuing Claims, Jan. 20

* 2:45pm: Bloomberg Consumer Comfort, Jan. 28

* 3pm: U.S. Construction Spending, Dec.

* 3pm: U.S. ISM Manufacturing, Jan. (final)

* Today, no exact timing:

** Bloomberg New Energy Finance Future of Mobility Summit in Palo Alto, California, 1st day of 2

** Brent loading program for March

** Royal Dutch Shell 4Q earnings

** Energy Mexico conference, Mexico City, final day

** Platts Middle Distillates Conference in Antwerp, 1st day of 2

Singapore 380 cSt

Mar18 - 381.75 / 383.75

Apr18 - 380.50 / 382.50

May18 - 380.75 / 382.75

Jun18 - 380.50 / 382.50

Jul18 - 379.50 / 381.50

Aug18 - 378.00 / 380.00

Q2-18 - 380.50 / 382.50

Q3-18 - 377.00 / 379.00

Q4-18 - 371.25 / 373.75

Q1-19 - 361.00 / 363.50

CAL19 - 317.75 / 320.75

CAL20 - 250.00 / 255.00

Singapore 180 cSt

Mar18 - 387.25 / 389.25

Apr18 - 386.50 / 388.50

May18 - 386.75 / 388.75

Jun18 - 386.50 / 388.50

Jul18 - 385.75 / 387.75

Aug18 - 384.25 / 386.25

Q2-18 - 386.50 / 388.50

Q3-18 - 383.25 / 385.25

Q4-18 - 377.75 / 380.25

Q1-19 - 368.00 / 370.50

CAL19 - 326.75 / 329.75

CAL20 - 260.75 / 265.75

Rotterdam Barges

Mar18 369.50 / 371.50

Apr18 369.00 / 371.00

May18 368.00 / 370.00

Jun18 367.00 / 369.00

Jul18 365.25 / 367.25

Aug18 - 363.25 / 365.25

Q2-18 368.00 / 370.00

Q3-18 363.00 / 365.00

Q4-18 352.75 / 355.25

Q1-19 342.00 / 344.50

CAL19 298.50 / 301.50

CAL20 232.50 / 237.50



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.






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

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