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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 20 Jul 2018 10:39 GMT

Commentary

Brent closed last night at $72.58 down $0.32 and WTI closed at $69.46, up $0.70. As the summer holiday season begins and most people are contemplating whether they can get away with wearing last year's Speedos, I wonder if the oil market is getting ready for a break as well. Since the end of June, Brent is down close to 10%. Much of this can be attributed to the fact that Trump got on to Twitter to rave on, in that idiotic way he has of typing, complaining to OPEC about oil prices "Not good! Trump not happy! In all seriousness, the market was due a bit of a correction. Demand hasn't quite been as good as people were hoping for so far, and unless Hurricane season blows a proper then I don't really see what else is going to trigger prices up to the $80 handle. Saying that, a Saudi minister yesterday tried with all his might to allay fears of oversupply and said that he expects "robust demand in Q3". The only "robust demand" is coming from the Saudi's themselves over the summer period with regards to the gargantuan fuel oil buying spree they are on. Aside from that, I'm not really sure how robust that demand forecast will be; but we shall see. In other news, one of the bullish factors that drove up the Brent market last week was the Norwegian oil strike, but that has been resolved over a smorgasbord of smoked fish and vodka, so happy days there. Good weekend.

Fuel Oil Market (Jul 19)

The front crack opened at -8.50, strengthening to -8.20, before weakening to -8.45, closing -8.30. The Cal 19 was valued at -15.25.

Asia's front month 380 cSt high-sulphur fuel oil time spread climbed to fresh highs on Thursday, lifted by few signs of easing supply constraints and limited arbitrage arrivals in August, trade sources said. The 380 cSt time spread for August/September climbed to a premium of about $8 per tonne on Thursday, broker sources said, its highest since June 2015.

Singapore's weekly onshore fuel oil inventories jumped 2.509 million barrels (about 374,000 tonnes) to 19.624 million barrels (2.929 million tonnes) in the week ended July 18. In the United States, weekly fuel oil inventories also rebounded from a record low after climbing 1.2 percent, or 343,000 barrels, to a total of 28.076 million barrels in the week to July 13.



Economic data/events (Times are London.)

* 6pm: Baker Hughes rig count

* ~6:30pm: ICE weekly commitments of traders report for Brent, gasoil

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

Singapore 380 cSt

Aug18 - 435.75 / 437.75

Sep18 - 426.50 / 428.50

Oct18 - 420.75 / 422.75

Nov18 - 417.00 / 419.00

Dec18 - 413.75 / 415.75

Jan19 - 410.50 / 412.50

Q4-18 - 417.25 / 419.25

Q1-19 - 407.75 / 409.75

Q2-19 - 397.75 / 400.25

Q3-19 - 372.00 / 374.50

CAL19 - 377.50 / 380.50

CAL20 - 303.25 / 309.25

Singapore 180 cSt

Aug18 - 445.25 / 447.25

Sep18 - 436.00 / 438.00

Oct18 - 431.00 / 433.00

Nov18 - 427.50 / 429.50

Dec18 - 424.50 / 426.50

Jan19 - 421.50 / 423.50

Q4-18 - 427.50 / 429.50

Q1-19 - 418.50 / 420.50

Q2-19 - 409.50 / 412.00

Q3-19 - 387.50 / 390.00

CAL19 - 392.25 / 395.25

CAL20 - 326.75 / 332.75

Rotterdam 3.5%

Aug18 - 413.00 / 415.00

Sep18 - 406.75 / 408.75

Oct18 - 402.25 / 404.25

Nov18 - 398.25 / 400.25

Dec18 - 394.75 / 396.75

Jan19 - 392.25 / 394.25

Q4-18 - 398.25 / 400.25

Q1-19 - 389.50 / 391.50

Q2-19 - 378.75 / 381.25

Q3-19 - 353.50 / 356.00

CAL19 - 355.25 / 358.25

CAL20 - 291.00 / 297.00



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






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Oil and fuel oil hedging market update
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