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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
Home » News



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 17 Apr 2018 08:47 GMT

Commentary

Brent closed down $1.16 last night to $71.42 and WTI closed at $66.22, down $1.17. "Oft expectation fails, and most oft there where most it promises: and oft it hits where hope is coldest, and despair most fits". Shakespeare. Kind of fitting I think for OPEC right now. There was an argument that OPEC can say "mission accomplished", but wasn't there an argument on Friday that the same could be said for Donald Trump's tweet regarding Syria? It will be interesting to see what happens in June. I'm pretty sure, with the market fairly stable around these kind of levels, that surely there will be talk of slowly bringing the agreement to an end and just having a pact that they will try and maintain current production levels and reconvene every time someone accidentally presses the "PUMP MORE" button. One of those big red buttons that's pretty hard to ignore and not push. I doubt June will see any hint of bringing the agreement to an abrupt end as that would literally scupper 18 months of hard work and high compliance in one foul commodity fund swoop. Granted, we have the Iranian nuclear agreement coming to a head mid-May, so I imagine we will see some volatile times in period between now and then.

Fuel Oil Market (April 16)

The front crack opened at -12.45, strengthening to -12.30, before weakening to -12.60, ending -12.45. The Cal 19 was valued at -14.60..

The prompt-month fuel oil crack to Brent crude firmed on Monday on falling crude prices, industry sources said. The May barges 380 cSt fuel oil crack to Brent crude narrowed its discount to about $12.25 a barrel on Monday when Brent was nearly 1.75 percent lower from its previous session at about $71.31 a barrel. Oil fell nearly 2 percent on Monday after U.S. drilling activity rose and fears waned about escalating tensions in the Middle East following air strikes on Syria over the weekend.

Meanwhile, stronger buying interest for 180 cSt fuel oil cargoes in the Singapore trading window helped lift cash premiums of the fuel to a six-session high, but no deals were reported as suppliers sought higher premiums. Bids for 180 cSt cargoes were between $1.50-$2 a tonne to Singapore quotes on Monday, compared to the highest bid of $1.50 Friday

Economic Data and Events

* 1:30pm: U.S. Housing Starts, March

* 1:30pm: U.S. Building Permits, March

* 2:15pm: U.S. Industrial Production, March

* 2:15pm: San Francisco Fed President John Williams speaks at National Association for Business Economics (NABE)-Bank of Spain International Symposium, Madrid

* 6:10pm: Chicago Fed President Charles Evans discusses current economic conditions and monetary policy at a Rotary Club, Chicago

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

Singapore 380 cSt

May18 - 384.25 / 386.25

Jun18 -383.25 / 385.25

Jul18 - 382.50 / 384.50

Aug18 - 381.25 / 383.25

Sep18 - 379.25 / 381.25

Oct18 - 377.25 / 379.25

Q3-18 - 381.00 / 383.00

Q4-18 - 374.50 / 376.50

Q1-19 - 365.75 / 368.25

Q2-19 - 358.50 / 361.00

CAL19 - 337.50 / 340.50

CAL20 - 272.50 / 277.50

Singapore 180 cSt

May18 - 395.50 / 397.50

Jun18 - 394.50 / 396.50

Jul18 - 393.50 / 395.50

Aug18 - 392.25 / 394.25

Sep18 - 390.25 / 392.25

Oct18 - 388.25 / 390.25

Q3-18 - 392.00 / 394.00

Q4-18 - 385.50 / 387.50

Q1-19 - 377.00 / 379.50

Q2-19 - 371.00 / 373.50

CAL19 - 352.50 / 355.50

CAL20 - 296.50 / 301.50

Rotterdam Barges

May18 371.75 / 373.75

Jun18 371.00 / 373.00

Jul18 369.25 / 371.25

Aug18 367.00 / 369.00

Sep18 364.25 / 366.25

Oct18 - 361.00 / 363.00

Q3-18 367.00 / 369.00

Q4-18 357.50 / 359.50

Q1-19 349.25 / 351.75

Q2-18 340.25 / 342.75

CAL19 317.75 / 320.75

CAL20 258.75 / 263.75



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 the company on +44 20 7090 1120.






Related Links:

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

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