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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

By the Oil Desk at Freight Investor Services.



Image credit:


Updated on 21 May 2018 08:38 GMT

Commentary

Brent closed Friday down $0.79 to settle at $78.51 and WTI closed at $71.28, down $0.21. $80 proves to be the resistance point, although I am sure we will break through that at some stage this week. However, I have been saying for a while that at the end of the day, all these forecasts of demand increasing come down to one thing - the end user. Gasoline prices at the pump are up over 25% year-on-year and, try as he might, Trump has not increased US workers' salaries by the same amount; so higher prices are inevitably going to affect demand. The market needs to find a balance; it is obvious that $60 per bbl is too low for most, but it seems to me that prices around $80 per bbl are too high for the many. We shall have to see whether the funds agree and start taking profits. Good day and week ahead to all.

Fuel Oil Market (May 18)

The front crack opened at -11.00, weakening to -11.05, strengthening to -10.90. The Cal 19 was valued at -17.45

The rise in bunker fuel costs has dampened shippers' prompt bunker fuel buying interest, weighing on 380 cSt ex-wharf and delivered premiums over the past two weeks. The Singapore fuel oil market rallied towards end-April as inventories dropped at the same time that some supplies in the region did not meet the standards for use as shipping fuel, further reducing the amount of supply available

Delivered bunker fuel premiums have also been squeezed, narrowing to about $3-$4 a tonne, down from $4-$5 a tonne at the start of the week, the sources said. Some bunker fuel quality issues in the U.S. Gulf have also emerged recently resulting in lower availabilities, but no real shortages, of bunker grade 380 cSt fuel oil, trade source said.

Weekly fuel oil stocks in the ARA oil and storage hub jumped 253,000 tonnes to a near six-month high of 1.403 million tonnes in the week ended May 17

Economic Data and Events: (Times are London.)

* 1:30pm: Bloomberg forecast of U.S. waterborne LPG exports

* 1:30pm: Chicago Fed Nat Activity Index, April

* Bloomberg proprietary forecast of Cushing crude inventory change plus weekly analyst survey of crude, gasoline, distillates inventories before Wednesday's EIA report

* Russia 10-days export program for June

* BP AGM in Manchester, U.K.

Singapore 380 cSt

Jun18 - 446.00 / 448.00

Jul18 - 443.25 / 445.25

Aug18 - 440.00 / 442.00

Sep18 - 436.50 / 438.50

Oct18 - 433.00 / 435.00

Nov18 - 429.50 / 431.50

Q3-18 - 439.75 / 441.75

Q4-18 - 429.50 / 431.50

Q1-19 - 417.25 / 419.75

Q2-19 - 402.75 / 405.25

CAL19 - 377.75 / 380.75

CAL20 - 295.25 / 300.25

Singapore 180 cSt

Jun18 - 456.25 / 458.25

Jul18 - 453.75 / 455.75

Aug18 - 450.75 / 452.75

Sep18 - 447.50 / 449.50

Oct18 - 444.25 / 446.25

Nov18 - 441.00 / 443.00

Q3-18 - 450.50 / 452.50

Q4-18 - 441.00 / 443.00

Q1-19 - 428.75 / 431.25

Q2-19 - 414.50 / 417.00

CAL19 - 392.25 / 395.25

CAL20 - 319.25 / 324.25

Rotterdam Barges

Jun18 - 432.00 / 434.00

Jul18 - 429.00 / 431.00

Aug18 - 425.50 / 427.50

Sep18 - 421.50 / 423.50

Oct18 - 417.00 / 419.00

Nov18 - 412.25 / 414.25

Q3-18 - 425.25 / 427.25

Q4-18 - 412.50 / 414.50

Q1-19 - 399.00 / 401.50

Q2-19 - 382.00 / 384.50

CAL19 - 356.75 / 359.75

CAL20 - 285.75 / 290.75



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 call +44 20 7090 1120, or email info@freightinvestor.com.






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

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