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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

07 Feb 2018 09:18 GMT

By the Oil Desk at Freight Investor Services.



Commentary

Brent closed down 0.76 last night to $66.86, WTI closed at $63.39, down 0.76. Commentating on this market can sometimes feel like trying to rewire a plug wearing oven gloves... while wearing a welding mask. Pointless. Fundamentally, nothing has really changed in the oil market from yesterday. Nothing. But we are 55c higher. Those guys sitting in their undies that I mentioned yesterday are just sitting there hitting the 'LIFT' button constantly. Actually, I take that back, something has changed from yesterday, and that's what EIA have said about US oil production. 'U.S. oil production is expected to surpass 11 million barrels per day in late 2018, a year earlier than projected last month.' A YEAR! IN A MONTH!! Can you imagine if you went with your partner to go and have a baby scan and they said "Ahhh, it's going to be a girl; all is healthy and your due date is 30th September". Then you get in your car and go into labour. Thanks, doc. Honestly, I want to go into these offices where these analysts get things so wrong. Seriously, how can you adjust production figures up by 1 mbpd in merely a month? Anyway, the EIA also have downgraded their US demand forecast as well, FYI. So 1 mbpd more crude and lower product demand? Yet crude rallies. Hmmm. Make America great again? Well, if 'great' means one of the largest oil suppliers in the world, then yes, I guess so. Stats later, 3.30pm UK time.

Fuel Oil Market (February 5)

The front crack opened at -9.90, weakening to -10.25, before strengthening to -10.10. The Cal 19 was valued at -14.70.

Asia's front-month high-sulphur fuel oil crack narrowed its discount to Brent crude on Tuesday for second straight session as crude oil prices continued to fall, trade sources said.

The March 180 cSt fuel oil crack to Brent crude was trading at about minus $7 a barrel around the end of Asia trading hours, its narrowest discount since Jan. 3 and compared with minus $7.58 a barrel in the previous session. Oil fell for a third day on Tuesday, as a rout in global equities triggered losses across bonds and commodities, although the crude price is in positive territory so far this year.

Meanwhile, cash premiums for 380 cSt fuel oil cargoes fell to a more than two-week low as suppliers accepted lower premiums for cargoes of the fuel amid limited buying interest for the fuel.

Economic Data and Events

* Noon: MBA Mortgage Applications, Feb. 2

* 3:30pm: EIA issues weekly U.S. oil inventory report

Singapore 380 cSt

Mar18 - 371.75 / 373.75

Apr18 - 371.75 / 373.75

May18 - 371.50 / 373.50

Jun18 - 371.00 / 373.00

Jul18 - 369.50 / 371.50

Aug18 - 368.00 / 370.00

Q2-18 - 371.25 / 373.25

Q3-18 - 368.25 / 370.25

Q4-18 - 363.00 / 365.50

Q1-19 - 354.00 / 356.50

CAL19 - 321.75 / 324.75

CAL20 - 254.00 / 259.00

Singapore 180 cSt

Mar18 - 378.00 / 380.00

Apr18 - 378.00 / 380.00

May18 - 377.50 / 379.50

Jun18 - 377.00 / 379.00

Jul18 - 375.75 / 377.75

Aug18 - 374.25 / 376.25

Q2-18 - 377.50 / 379.50

Q3-18 - 374.75 / 376.75

Q4-18 - 369.75 / 372.25

Q1-19 - 362.25 / 364.75

CAL19 - 331.00 / 334.00

CAL20 - 265.00 / 270.00

Rotterdam Barges

Mar18 358.75 / 360.75

Apr18 358.75 / 360.75

May18 358.25 / 360.25

Jun18 357.25 / 359.25

Jul18 355.50 / 357.50

Aug18 353.50 / 355.50

Q2-18 358.25 / 360.25

Q3-18 353.75 / 355.75

Q4-18 344.25 / 346.75

Q1-19 334.75 / 337.25

CAL19 299.00 / 302.00

CAL20 239.75 / 244.75



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.


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




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