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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 06 Apr 2018 09:48 GMT

Commentary

Brent closed up $0.31 last night to $68.33, and WTI closed at $63.54, up $0.17. Week-on-week, crude is down around $2.40 per bbl or 3.5%. All this trade war talk between the USA and China seems, quite frankly, pretty petty. It's like two kids at preschool standing in front of each other and saying "I know you are, but what am I?". It is clear that the oil market needs one indicator to keep it up at these levels and that is consistent increases in demand. Quite how the US thinks putting tariffs on Chinese imports is good for demand is only for Donald to know. When Belgium looks pretty politically stable, you know the world is in trouble. Anyway, in other news, Saudi have increased their price of their light crude to Asia. Which is a bit strange. Maybe the cracks on light ends are improving and the Saudi's want to take advantage of their crude yielding those products, but they might as well just literally open the door for the US producers and allow them to help themselves. They are going to have to use all the tricks in the book to keep revenue up after taking the brunt of the cuts from the OPEC agreement. Like the big brother of the cartel, they are leading the way.

Fuel Oil Market (April 5)

The front crack opened at -11.55, strengthening to -11.20, before weakening to -11.40. The Cal 19 was valued at -14.40.

Improved sentiment on Thursday helped Asia's 380 cSt market firm as buying interest boosted the prompt-month 380 cSt time spread, recouping some of the losses from earlier in the week, trades sources said. Sentiment in the 380 market had recently been dampened by ample supplies of high-viscosity fuel oil grades and a shortage of blendstocks. Increased demand for blendstocks boosted the promptmonth viscosity spread for a seventh consecutive session to a near three-year high.

Singapore weekly onshore fuel oil inventories fell 9 percent, or 1.985 million barrels (296,000 tonnes), to a 12-week low of 19.706 million barrels (about 2.941 million tonnes) in the week ended April 4. The drop in onshore Singapore fuel oil inventories may also in part be a result of at least one supplier concluding its storage lease at the end of March at one of Singapore's oil tank farms.

Economic Data and Events

* 6pm: Baker Hughes weekly rig count

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

** NOTE: ICE to release positioning data at 6:30pm London from April 13

* 8:30pm: CFTC weekly commitments of traders report on various U.S. futures and options contracts

* 1:30pm: U.S. March Nonfarm jobs report, est. 185k (prior 313k)

Singapore 380 cSt

May18 - 367.75 / 369.75

Jun18 - 367.00 / 369.00

Jul18 - 365.75 / 367.75

Aug18 - 364.00 / 366.00

Sep18 - 362.25 / 364.25

Oct18 - 360.25 / 362.25

Q3-18 - 364.00 / 366.00

Q4-18 - 357.75 / 359.75

Q1-19 - 350.00 / 352.50

Q2-19 - 354.50 / 357.50

CAL19 - 338.25 / 343.25

CAL20 - 288.75 / 296.75

Singapore 180 cSt

May18 - 378.50 / 380.50

Jun18 - 377.00 / 379.00

Jul18 - 375.75 / 377.75

Aug18 - 374.00 / 376.00

Sep18 - 372.25 / 374.25

Oct18 - 370.25 / 372.25

Q3-18 - 374.00 / 376.00

Q4-18 - 367.00 / 369.00

Q1-19 - 359.50 / 362.00

Q2-19 - 354.50 / 357.50

CAL19 - 338.25 / 343.25

CAL20 - 288.75 / 296.75

Rotterdam Barges

May18 355.75 / 357.75

Jun18 355.00 / 357.00

Jul18 353.25 / 355.25

Aug18 351.00 / 353.00

Sep18 348.25 / 350.25

Oct18 - 345.00 / 347.00

Q3-18 350.75 / 352.75

Q4-18 341.25 / 343.25

Q1-19 334.00 / 336.50

Q2-18 325.50 / 328.50

CAL19 305.50 / 310.50

CAL20 256.00 / 264.00



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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