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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 04 Apr 2018 08:13 GMT

Commentary

Brent closed last night at $68.12, up $0.48, WTI closed at $63.51, up $0.50 and INE closed at 405.50 yuan/bbl or $64.54 per bbl. So, I read yesterday that OPEC have been rather sneaky in their monthly report. Mainly because I didn't really see it published anywhere, it just appeared surreptitiously in the paper this morning whilst I was downing my first brew of the day. I have to admire OPEC; they don't give up. One commentator eloquently said this about the monthly report "...The "shale skepticism" persistently reflected in OPEC's forecast puts its key predictions in question and raises concerns regarding a potential bias." Ha! Surely no one is surprised that the report is biased!? Anyway, moving on... it's Wednesday so that means data time from the US. Apparently, we are going to see a draw on crude inventories. Shock. Considering the cracks in the US are still paying well, it is of no surprise that refinery runs are up. Cushing stocks are up by 4mn bbls as well, so I don't see this week's set of data being particularly encouraging for the bulls. Let's add that China are also starting to ship gasoline to the US and I think we can perhaps start surmising that there could be a lot of oil around for a while to come.

Fuel Oil Market (April 3)

The front crack opened at -12.10, weakening to -12.15, before strengthening to -11.85. The Cal 19 was valued at -15.00.

Asia's 180 cSt fuel oil market extended gains amid concerns of narrow blendstock supplies over the coming month and ample inventories of high-viscosity fuel oil, trade sources said.

Asia's April viscosity spread climbed to its highest since June 2015 on Tuesday after nearly three weeks of steady gains, while cash premiums of the fuel rose to their highest in nearly six months.

By contrast, ample supplies of the higher viscosity fuel weighed on 380 cSt fuel oil cash premiums and time spreads, sources said. The prompt-month 380 cSt fuel oil contango structure widened to 75 cents a tonne on Tuesday, its widest discount since July.


Economic Data and Events

* noon: U.S. MBA mortgage applications March 30; (pr. 4.8%)

* 1:15pm: U.S. ADP employment change March; est. 210k (pr. 235k)

* 3pm: U.S. factory orders Feb.; est. 1.7% (pr. -1.4%)

* 3pm: U.S. durable goods orders Feb. final; (pr. 3.1%)

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

* Genscape weekly ARA crude stockpiles report

Singapore 380 cSt

May18 - 363.75 / 365.75

Jun18 - 363.50 / 365.50

Jul18 - 362.75 / 364.75

Aug18 - 361.25 / 363.25

Sep18 - 359.75 / 361.75

Oct18 - 358.00 / 360.00

Q3-18 -361.25 / 363.25

Q4-18 - 355.50 / 357.50

Q1-19 - 348.50 / 351.00

Q2-19 - 341.75 / 344.75

CAL19 - 319.75 / 324.75

CAL20 - 260.00 / 268.00

Singapore 180 cSt

May18 - 373.25 / 375.25

Jun18 - 372.75 / 374.75

Jul18 - 371.75 / 373.75

Aug18 - 370.25 / 372.25

Sep18 - 368.75 / 370.75

Oct18 - 367.00 / 369.00

Q3-18 - 370.25 / 372.25

Q4-18 - 364.75 / 366.75

Q1-19 - 358.00 / 360.50

Q2-19 - 352.50 / 355.50

CAL19 - 333.25 / 338.25

CAL20 - 283.75 / 291.75

Rotterdam Barges

May18 348.75 / 350.75

Jun18 351.50 / 353.50

Jul18 350.00 / 352.00

Aug18 348.00 / 350.00

Sep18 345.25 / 347.25

Oct18 - 342.25 / 344.25

Q3-18 347.75 / 349.75

Q4-18 338.75 / 340.75

Q1-19 332.00 / 334.50

Q2-18 323.75 / 326.75

CAL19 300.50 / 305.50

CAL20 247.00 / 255.00



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 the company on +44 20 7090 1120.






Related Links:

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

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